ByteDance, the Chinese tech giant and owner of TikTok, is partnering with U.S. chip designer Broadcom to develop a cutting-edge AI processor, according to sources familiar with the project. This collaboration aims to secure a steady supply of high-end chips amid ongoing U.S.-China tensions.
The planned chip is a 5-nanometer application-specific integrated chip (ASIC), which will comply with U.S. export restrictions. Manufacturing will be outsourced to Taiwan Semiconductor Manufacturing Company (TSMC), the sources revealed.
This development marks a significant step as there have been no publicly announced collaborations between Chinese and U.S. companies on advanced technology like 5nm chips since the U.S. imposed export controls on advanced semiconductors in 2022. Typically, U.S.-China semiconductor deals involve less advanced technology.
The partnership with Broadcom, an existing business partner of ByteDance, is expected to reduce procurement costs and ensure a stable supply of higher-end chips. However, TSMC is not anticipated to begin manufacturing the new chip this year. Although design work is progressing, the “tapeout” phase, which signals the transition from design to manufacturing, has not yet commenced.
ByteDance, like many global tech firms, is heavily invested in generative artificial intelligence. However, Chinese companies face a more limited supply of AI chips compared to their international counterparts due to U.S. export controls that restrict access to Nvidia’s most advanced chipsets. These controls are intended to hinder advancements in AI and supercomputing by China’s military. Consequently, there is fierce competition for U.S. chips developed specifically for the Chinese market and for those from Huawei, one of the few Chinese AI accelerator manufacturers.
Since at least 2022, ByteDance has been using Broadcom’s Tomahawk 5nm high-performance switch chip and its Bailly switch for AI computer clusters, as publicly stated by Broadcom.
Securing AI chips is crucial for ByteDance to enhance its algorithms. Beyond TikTok and its Chinese counterpart Douyin, ByteDance operates a range of popular apps, including a ChatGPT-like chatbot service called Doubao, which boasts 26 million users.
To support its AI initiatives, ByteDance has stockpiled Nvidia chips, including A100 and H100 models available before U.S. sanctions, and A800 and H800 models developed for the Chinese market but later restricted. ByteDance allocated $2 billion for Nvidia chip purchases last year. Additionally, ByteDance purchased Huawei’s Ascend 910B chips last year, according to sources.
Currently, ByteDance has numerous semiconductor-related job openings, including 15 positions for ASIC chip designers, as seen on its website. The company has also been recruiting top talent from other Chinese AI chip firms, according to one source.
This strategic move reflects ByteDance’s commitment to advancing its AI capabilities amid a challenging geopolitical landscape.
