New Delhi

A recent report by Reuters stated that the Chinese tech giant ByteDance, which owns the popular TikTok app, is working with US chip designer Broadcom to develop an advanced artificial intelligence processor, according to sources familiar with the project.

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This collaboration comes amid ongoing tensions between the US and China and aims to ensure a reliable supply of high-end chips for ByteDance.

The chip is constructed on a 5-nanometer architecture and tailored to meet ByteDance's specific needs (an application-specific integrated circuit or ASIC).

It will adhere to US export restrictions. Sources have disclosed that the manufacturing process is expected to be outsourced to Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker.

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This collaboration is a significant development because there have been no publicly announced joint efforts between Chinese and US companies on such advanced chip technology (5nm or higher) since the US implemented export controls on these chips in 2022.

Previously, US-China deals in the semiconductor sector have focused on less sophisticated technologies.

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The partnership with Broadcom, an existing business partner, is expected to benefit ByteDance in two key ways. First, it will help reduce procurement costs. Second, it will ensure a reliable supply of advanced chips, essential for enhancing ByteDance's AI capabilities across its various apps, including TikTok and its Chinese counterpart, Douyin.

The design work for the new chip is currently in progress, but mass production is not anticipated to start this year.

According to a source, the "tapeout" stage, which indicates the conclusion of the design phase and the commencement of manufacturing, has not been initiated yet.

ByteDance, Broadcom, and TSMC have not responded to requests for comment.

The demand for advanced AI chips is increasing as ByteDance and other global tech companies heavily invest in generative AI technologies.

However, ByteDance and its Chinese counterparts are facing a significant challenge due to limited access to AI chips compared to their overseas competitors.

The latest chipsets from Nvidia, a leading developer of AI chips, are subject to US export controls. These controls are intended to hinder China's progress in AI and supercomputing capabilities for military use.

As a result, ByteDance is now aggressively seeking alternative solutions. This includes considering US chips designed specifically for the Chinese market, as well as those offered by Huawei, one of the few Chinese manufacturers of AI accelerators.

To enhance its AI capabilities, ByteDance has accumulated Nvidia chips, as per a reliable source. These include A100 and H100 chips obtained before the initial US sanctions, as well as A800 and H800 chips produced by Nvidia for the Chinese market but later subjected to restrictions. The source also disclosed that ByteDance allotted a substantial budget of $2 billion for Nvidia chip purchases last year.

ByteDance not only stockpiled Nvidia chips but also bought Huawei's Ascend 910B chips last year, according to two separate sources.

ByteDance's dedication to developing its in-house AI chip capabilities is evident on its website, which currently has hundreds of job openings related to semiconductors, including 15 positions specifically for ASIC chip designers. The company has also been actively recruiting top talent from other Chinese AI chip firms, as per a source with firsthand knowledge of the situation.

(With inputs from Reuters)