Eduardo Baptista
BEIJING (Reuters) – China’s ByteDance is teaming up with U.S. semiconductor designer Broadcom to develop advanced AI processors, two sources familiar with the matter said, a move that will help the TikTok owner ensure ample supplies of powerful chips amid ongoing U.S.-China tensions.
The 5-nanometer chips are customized products known as application-specific integrated circuits (ASICs) that will comply with U.S. export controls and manufacturing will be outsourced to Taiwan’s TSMC, the sources said.
No collaboration between Chinese and U.S. companies on developing chips with technologies more advanced than 5nm has been publicly announced since the U.S. government imposed export controls on cutting-edge semiconductors in 2022. U.S.-China deals in this area have generally involved less advanced technologies.
A collaboration with Broadcom, ByteDance’s existing business partner, will help cut procurement costs and ensure a stable supply of high-performance chips, said the people, who asked not to be identified because of the sensitivity of China’s semiconductor issue.
But TSMC does not plan to start manufacturing the new chips this year, the people said. While design work is progressing well, “tape-out,” which marks the end of the design phase and the start of manufacturing, has not yet begun, one of the people said.
ByteDance and Broadcom did not respond to repeated requests for comment. TSMC declined to comment.
Like many global tech companies, ByteDance is making a serious push into generative artificial intelligence (GAI), but it and its Chinese peers must contend with a much more limited supply of AI chips than their international peers.
Nvidia’s cutting-edge chipsets are out of reach due to U.S. export controls aimed at thwarting advances in AI and supercomputing by the Chinese military. Competition is fierce between U.S.-made chips developed specifically for the Chinese market and those from rival Huawei, one of the few Chinese makers of AI accelerators.
ByteDance and Broadcom have been business partners since at least 2022. In an official statement, Broadcom said the Chinese company purchased the US company’s Tomahawk 5nm high-performance switch chips and Byree switches for AI computer clusters.
Securing AI chips is essential to strengthening algorithms for ByteDance, the company behind a variety of popular apps including TikTok, the Chinese version of the short-video app Douyin and Doubao, a ChatGPT-like chatbot service with 26 million users.
ByteDance is stockpiling Nvidia chips to support its AI efforts, according to a second person briefed on the matter.
This includes the A100 and H100 chips that were available before the first round of U.S. sanctions were imposed, as well as the A800 and H800 chips that Nvidia made for the Chinese market and later restricted, the people said, adding that ByteDance allocated $2 billion to buy Nvidia chips last year.
ByteDance also bought Huawei’s Ascend 910B chips last year, according to two sources familiar with the matter.
ByteDance currently has hundreds of semiconductor-related job listings, including 15 positions for ASIC chip designers, according to a review of its website.
The company is poaching top talent from other Chinese AI chip companies, according to one source with direct knowledge of the matter.
(Reporting by Eduardo Baptista in Beijing and Reuters reporters; Editing by Miyeon Kim and Edwina Gibbs)
