ByteDance, the Chinese company behind TikTok, is collaborating with Broadcom, a US chip designer, to develop a cutting-edge artificial intelligence processor. This partnership aims to ensure ByteDance has reliable access to high-performance chips amidst ongoing tensions between the US and China. The 5-nanometer chip in development is a customized ASIC (application-specific integrated circuit) designed to comply with US export regulations. According to sources familiar with the matter, the chip will be manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).
Since the introduction of export controls by Washington in 2022 for state-of-the-art semiconductors, there have been no publicly disclosed collaborations between Chinese and US companies focusing on chip development using 5nm or more advanced technology. Generally, agreements between the US and China in this sector involve significantly less advanced technologies.
The sources, who declined to be identified due to the sensitivity of semiconductor issues in China, said ByteDance’s tie-up with Broadcom, an existing business partner, would help slash procurement costs and ensure a stable supply of higher-end chips. However, TSMC is not expected to start manufacturing the new chip this year, they said. One of them said that while design work is well underway, the “tapeout” which marks the end of the design phase and the beginning of manufacturing has not started.
Repeated requests for comment from ByteDance and Broadcom went unanswered. TSMC chose not to comment as well. Similar to many international tech companies, ByteDance has significantly ramped up its efforts in generative AI. However, ByteDance and other Chinese firms face a much more restricted supply of AI chips compared to their global counterparts.
US export controls, which target advancements in AI and supercomputing by China's military, prevent access to Nvidia's most advanced chipsets. This has intensified competition for US-made chips tailored for the Chinese market, as well as those from Huawei, a leading Chinese provider of AI accelerators.
ByteDance and Broadcom have been business partners since at least 2022. The Chinese firm has purchased the US company’s Tomahawk 5nm high-performance switch chip as well as its Bailly switch for AI computer clusters, Broadcom has said. Securing AI chips is crucial for ByteDance to make its algorithms more powerful. In addition to TikTok and the Chinese version of the short-video app called Douyin, ByteDance operates a range of popular apps including a ChatGPT-like chatbot service called Doubao, which has 26 million users.
Based on information from another source familiar with the situation, ByteDance has accumulated Nvidia chips to bolster its AI initiatives. This stockpile includes A100 and H100 chips procured before the initial round of US sanctions, as well as A800 and H800 chips specifically manufactured by Nvidia for the Chinese market, which were later subjected to restrictions. The source mentioned that ByteDance allocated $2 billion for Nvidia chip purchases last year. According to two sources familiar with the situation, ByteDance acquired Huawei's Ascend 910B chips last year. Currently, ByteDance has posted hundreds of job openings related to semiconductors, including 15 positions for ASIC chip designers.