China’s ByteDance is collaborating with U.S. chip designer Broadcom (AVGO.O) to develop an advanced AI processor, according to two sources familiar with the situation. This initiative aims to help the owner of TikTok secure a sufficient supply of high-end chips amid U.S.-Sino tensions.
The 5-nanometer chip, a customized product known as an application-specific integrated chip (ASIC), would comply with U.S. export restrictions, and the manufacturing work would be outsourced to Taiwan’s TSMC (2330.TW).
Since Washington imposed export controls on cutting-edge semiconductors in 2022, there have been no publicly announced collaborations between Chinese and U.S. companies involving 5nm or more advanced technology. Typically, U.S.-China deals in this sector involve much less sophisticated technology.
ByteDance’s partnership with Broadcom, an existing business partner, would help reduce procurement costs and ensure a stable supply of high-end chips, said the sources, who declined to be identified due to the sensitivity of semiconductor issues in China. However, TSMC is not expected to start manufacturing the new chip this year. One source noted that while the design work is well underway, the “tapeout”—which marks the end of the design phase and the beginning of manufacturing—has not started.
Like many global tech firms, ByteDance has made significant strides in generative artificial intelligence. However, the company and its Chinese peers face a more limited supply of AI chips compared to their overseas counterparts. Nvidia’s (NVDA.O) most advanced chipsets are out of reach due to U.S. export controls aimed at hindering breakthroughs in AI and supercomputing by China’s military. Competition for U.S. chips developed specifically for the Chinese market, as well as those from rival Huawei (HWT.UL), one of the few Chinese makers of AI accelerators, is fierce.
