Exclusive China’s ByteDance working with Broadcom to develop advanced AI chip, sources say

By Eduardo Baptista

BEIJING (Reuters) – China’s ByteDance is working with U.S. chip designer Broadcom on developing an advanced AI processor, two sources familiar with the matter said, a move that would help TikTok owner secure sufficient supply of chips state-of-the-art technology amid tensions between the US and China.

The 5-nanometer chip — a custom product known as an application-specific integrated chip (ASIC) — would comply with U.S. export restrictions and manufacturing work would be outsourced to Taiwan’s TSMC, the sources added.

There have been no publicly announced chip development collaborations between Chinese and U.S. companies involving 5nm or more advanced technology since Washington introduced export controls on cutting-edge semiconductors in 2022. U.S.-China agreements in the sector generally concern much less sophisticated technology.

ByteDance’s partnership with Broadcom, an existing business partner, would help reduce procurement costs and ensure a stable supply of next-generation chips, said the sources, who declined to be named due to the sensitivity of semiconductor issues in China.

However, TSMC is not expected to start manufacturing the new chip this year, they said. One of them said that although design work is well underway, the “tapeout” – which marks the end of the design phase and the start of manufacturing – has not yet begun.

ByteDance and Broadcom did not respond to repeated requests for comment. TSMC declined to comment.

Like many global technology companies, ByteDance has launched a big push into generative artificial intelligence, but the company and its Chinese peers have to deal with a much more limited supply of AI chips than their foreign counterparts.

Nvidia’s most advanced chipsets are out of reach due to US export controls that aim to prevent advances in AI and supercomputing by the Chinese military. Competition for U.S. chips developed specifically for the Chinese market, as well as those from rival Huawei, one of China’s few AI accelerator makers, is fierce.

ByteDance and Broadcom have been business partners since at least 2022. The Chinese company purchased the US company’s Tomahawk 5nm high-performance switch chip, as well as its Bailly switch for AI computer clusters, Broadcom said in public statements.

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 number of popular apps, including a ChatGPT-like chatbot service called Doubao, which has 26 million users.

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To support its AI push, ByteDance has stockpiled Nvidia chips, according to another person briefed on the matter.

This includes the A100 and H100 chips available before the first round of US sanctions began, as well as the A800 and H800 chips that Nvidia manufactured for the Chinese market but were also restricted later, the source said, adding that ByteDance allocated US$2 billion for Nvidia purchases. chips last year.

ByteDance also bought Huawei’s Ascend 910B chips last year, two separate sources with knowledge of the matter said.

Bytedance currently has hundreds of semiconductor-related job openings posted, including 15 for ASIC chip designers, according to checks on its website.

It has also been poaching key people from other Chinese AI chip companies, according to one of the sources with direct knowledge of the matter.

(Reporting by Eduardo Baptista in Beijing and Reuters staff; Editing by Miyoung Kim and Edwina Gibbs)