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ByteDance (BDNCE), the Chinese tech giant behind TikTok, has teamed up with Broadcom (NASDAQ:AVGO) on the development of a cutting-edge AI chip. The primary objective of this collaboration is to secure a reliable stream of high-end chips and drive down procurement expenses amidst the ongoing trade tensions between China and the United States. This information comes from two insider sources who spoke to Reuters.
According to reports, the production of this 5-nanometer chip, an application-specific integrated circuit set to adhere to U.S. export regulations, will be outsourced to Taiwan Semiconductor (TSM). TSMC is anticipated to lead the manufacturing process for the new chip design, although specific timelines are yet to be finalized.
Although ByteDance and Broadcom have not officially verified their partnership, if the collaboration proceeds, it would mark the first instance of a Chinese company and an American firm joining forces to develop 5nm or more sophisticated chip technologies since Washington introduced export constraints over chip sales due to national security apprehensions.
Given the existing constraints, Chinese enterprises confront limited access to premium U.S. chips compared to their global counterparts, particularly at a time when numerous companies are venturing into generative AI technology.
For ByteDance, a consistent supply of AI chips holds significant importance. The company is known for housing numerous popular applications including its AI chatbot Doubao, which resembles ChatGPT. ByteDance had already amassed Nvidia’s cutting-edge chips in anticipation of U.S. trade restrictions, as disclosed by an additional source to Reuters. Moreover, the company had allocated $2 billion for the procurement of these chips the previous year. ByteDance also acquired Huawei’s Ascend 910B chips in 2023.
Further Insights on Broadcom and ByteDance
