Multiple VDD and GND in a Chip

Buzzword: Ground Bounce,(and a couple of other effects). There are large variations in the current used by the chip, so any impedance in the package connections impacts the actual voltage the chip runs on.

Also they don't have to waste chip area on power distribution.

Mark Zenier snipped-for-privacy@eskimo.com Washington State resident

Two reasons (at least):

1) The power pins/leads may look like straight bits of wire but even they have some stray inductance. This matters because fast logic devices draw fast current spikes from their power supplies. Fast enough current spikes + even small inductance = voltage spikes. Voltage spikes on supposedly DC voltage rails = bad news. External capacitors can only help a little because they are physically too far away from the source of the problem (eg they are off chip).

2) Some devices (like processors) draw more DC current than one pin/socket can carry.

Point 1) is the main reason.