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ByteDance Collaborates with Broadcom to Develop Advanced AI Chip

China’s ByteDance is partnering with U.S. chip designer Broadcom (NASDAQ) to develop a cutting-edge AI processor, according to sources familiar with the matter. This collaboration aims to secure a steady supply of high-end chips for TikTok’s parent company amid ongoing U.S.-China trade tensions.

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The project involves creating a 5-nanometer chip, a type of application-specific integrated circuit (ASIC), which will comply with U.S. export restrictions. The manufacturing work will be outsourced to Taiwan’s TSMC, the sources added.

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This marks a significant development as there have been no public collaborations between Chinese and U.S. companies on 5nm or more advanced technology since Washington imposed export controls on advanced semiconductors in 2022. Typically, U.S.-China deals in this sector involve much less sophisticated technology.

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The partnership with Broadcom, a longstanding business partner of ByteDance, is expected to reduce procurement costs and ensure a stable supply of high-end chips. However, TSMC is not expected to begin manufacturing the new chip this year, with the design phase still ongoing and the “tapeout” phase yet to commence.

Both ByteDance and Broadcom have not responded to repeated requests for comment, while TSMC declined to comment.

ByteDance, like many global tech firms, is heavily investing in generative artificial intelligence. However, Chinese companies face a more restricted supply of AI chips compared to their international counterparts. U.S. export controls have made Nvidia’s (NASDAQ
) most advanced chipsets inaccessible to China, hindering advancements in AI and supercomputing by China’s military. Competition for U.S. chips tailored for the Chinese market and those from rival Huawei, one of the few Chinese AI accelerator manufacturers, remains intense.

ByteDance and Broadcom have been partners since at least 2022. ByteDance has purchased Broadcom’s Tomahawk 5nm high-performance switch chip and Bailly switch for AI computer clusters, as stated by Broadcom in public disclosures.

Securing AI chips is crucial for ByteDance to enhance its algorithms. The company operates various popular apps, including TikTok, its Chinese counterpart Douyin, and a ChatGPT-like chatbot service called Doubao, which boasts 26 million users.

To support its AI initiatives, ByteDance has stockpiled Nvidia chips, according to a separate source. This includes A100 and H100 chips acquired before the initial round of U.S. sanctions, as well as A800 and H800 chips designed for the Chinese market but later restricted. ByteDance reportedly allocated $2 billion for Nvidia chip purchases last year.

Additionally, ByteDance purchased Huawei’s Ascend 910B chips last year, according to two separate sources.

ByteDance currently has numerous semiconductor-related job openings posted on its website, including 15 positions for ASIC chip designers.

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