China’s ByteDance is collaborating with U.S. chip designer Broadcom to develop an advanced AI processor, according to sources familiar with the matter. This strategic move aims to secure a steady supply of high-end chips for TikTok’s parent company amid escalating U.S.-China tensions. The customized 5-nanometer application-specific integrated chip (ASIC) will comply with U.S. export restrictions, with manufacturing outsourced to Taiwan’s TSMC. This partnership marks a significant step, as no similar collaborations have been publicly announced since Washington imposed export controls on advanced semiconductors in 2022.
This alliance with Broadcom, an existing business partner, is expected to reduce procurement costs and ensure a stable supply of high-performance chips for ByteDance. Although design work is progressing well, the manufacturing phase has not yet commenced, with the “tapeout” stage still pending. ByteDance and Broadcom have not commented on the matter, and TSMC also declined to provide any statements.
ByteDance, like many global tech firms, is heavily investing in generative artificial intelligence. However, the company faces significant challenges in securing AI chips due to U.S. export controls aimed at restricting China’s advancements in AI and supercomputing. Nvidia’s most advanced chipsets are unavailable to ByteDance, intensifying competition for U.S. chips developed for the Chinese market and those from Huawei, one of the few Chinese manufacturers of AI accelerators.
Since 2022, ByteDance has been procuring Broadcom’s Tomahawk 5nm high-performance switch chip and Bailly switch for AI computer clusters. Ensuring a reliable supply of AI chips is crucial for ByteDance to enhance its algorithms, powering applications such as TikTok, Douyin, and the ChatGPT-like chatbot Doubao, which boasts 26 million users.
In response to chip shortages, ByteDance has stockpiled Nvidia chips, including the A100 and H100 models available before U.S. sanctions, and the A800 and H800 models designed for the Chinese market but later restricted. ByteDance allocated $2 billion last year for Nvidia chip purchases and also acquired Huawei’s Ascend 910B chips.
ByteDance is actively expanding its semiconductor capabilities, with hundreds of job openings related to semiconductors, including 15 positions for ASIC chip designers. The company has also been recruiting top talent from other Chinese AI chip firms to bolster its semiconductor expertise.
This collaboration with Broadcom highlights ByteDance’s commitment to advancing its AI technologies despite geopolitical challenges. By securing high-end chips and enhancing its AI capabilities, ByteDance aims to maintain its competitive edge in the rapidly evolving tech landscape.
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