The way I thought of it, a modchip made a console play burnt games, or those from other regions.
On the PSP, we can't burn games to UMD (writers aren't available to public), and games are region free.
So would a modchip be to replace the firmware (stored on some sort of internal memory) in the PSP? with one that allows games from ISOs on memory sticks and homebrew?
If so, would that then mean that the chipped PSP could never accept a new firmware upgrade again?