Key Points:
- The chip will comply with U.S. export restrictions and be manufactured by TSMC.
- It marks a rare high-tech collaboration between Chinese and U.S. firms post-2022 export controls.
- The partnership aims to reduce costs and ensure a stable chip supply for ByteDance.
- ByteDance is heavily investing in AI and is facing limited chip supply due to U.S. sanctions.
China’s ByteDance is partnering with U.S. chip designer Broadcom to develop an advanced AI processor, according to two sources familiar with the matter. This collaboration aims to secure a stable supply of high-end chips for ByteDance amid escalating U.S.-China tensions.
The 5-nanometer chip, an application-specific integrated chip (ASIC), will comply with U.S. export restrictions. The manufacturing work will be outsourced to Taiwan’s TSMC. Notably, this collaboration marks one of the few high-tech partnerships between Chinese and U.S. companies since the U.S. imposed export controls on cutting-edge semiconductors in 2022. Most U.S.-China deals in the semiconductor sector involve less sophisticated technology.
ByteDance’s partnership with Broadcom, a company they have worked with since at least 2022, is expected to reduce procurement costs and ensure a steady supply of advanced chips. However, TSMC is not expected to start manufacturing the new chip this year. One source mentioned that while design work is progressing, the “tapeout” phase, which transitions design to manufacturing, has not yet begun.
ByteDance and Broadcom declined to comment, and TSMC refused to provide a statement. Like many global tech firms, ByteDance is heavily investing in generative AI. However, Chinese companies face a more limited supply of AI chips than their overseas counterparts due to U.S. export controls that prevent AI and supercomputing advancements by China’s military.
Due to these restrictions, Nvidia’s most advanced chipsets are currently inaccessible to ByteDance. Competition for U.S. chips designed for the Chinese market and those from Huawei, one of the few Chinese AI accelerator makers, is intense. ByteDance and Broadcom have collaborated on multiple projects, with ByteDance purchasing Broadcom’s Tomahawk 5nm high-performance switch chip and its Bailly switch for AI computer clusters.
Securing AI chips is critical for ByteDance to enhance its algorithms. Besides TikTok and Douyin (the Chinese version of TikTok), ByteDance operates various popular apps, including Doubao, a ChatGPT-like chatbot service with 26 million users. To support its AI ambitions, ByteDance has stockpiled Nvidia chips, including A100 and H100 chips, available before U.S. sanctions, and A800 and H800 chips made specifically for the Chinese market but later restricted. ByteDance allocated $2 billion for Nvidia chip purchases last year and also bought Huawei’s Ascend 910B chips.
ByteDance has hundreds of semiconductor-related job openings, including 15 for ASIC chip designers. The company has also recruited top talent from other Chinese AI chip firms to bolster its capabilities.
