On-Chip Variations (OCV) refers to the intra-chip variations that the transistors on a single die exhibit in various factors like the Process, Voltage and Temperature.
The two transistors which are adjacent on a chip may exhibit a difference in their channel lengths due to imperfections in the manufacturing process. Voltage difference arises because of the different IR drops from the voltage rail to the voltage pin of the standard cells.
Temperature difference may be due to higher toggling activity in a given area of the chip, resulting in formation of localized hot spots and hence higher temperature.
On-chip variations play a critical role in designing of an SoC. OCVs often entail the designers to follow a pessimistic approach, especially in their physical implementation. A lot of research is dedicated to mitigating the impact of OCVs on the functionality and robustness of the chip.