JAKARTA - ByteDance from China is working with US chip designer Broadcom to develop a state-of-the-art AI processor, according to two sources familiar with the issue. This move will help the TikTok owner secure a sufficient supply of high-end chips amid US-China tensions.

The 5 nanometer chip - a custom product known as the application-specific integrated chip (ASIC) - will comply with US export restrictions and manufacturing work will be redirected to Taiwan's TSMC, the source added.

There has been no public announcement of a chip development collaboration between Chinese and US companies involving 5nm or more advanced technology since Washington introduced export controls for advanced semiconductors by 2022. US-China deals in the sector generally involve technology that is far less sophisticated.

ByteDance's collaboration with Broadcom, an existing business partner, will help reduce procurement costs and ensure stable high-end chip supplies, said a source who declined to be identified due to sensitivity to semiconductor issues in China.

However, TSMC hasn't started production of the new chip this year, they said. One of the sources said while the design work was going well, "tapezers" - which marks the end of the design phase and early manufacturing - had not yet started.

ByteDance and Broadcom did not respond to repeated requests for comment from the media. TSMC also declined to comment.

Like many global tech companies, ByteDance has launched a huge boost in generative artificial intelligence but companies and its Chinese counterparts must face a much more limited supply of AI chips compared to their overseas counterparts.

Nvidia's most advanced chipset is unreachable due to US export controls aimed at hindering AI breakthroughs and supercomputers by the Chinese military. Competition for US chips developed specifically for the Chinese market as well as from rival Huawei, one of China's few AI accelerator makers, is very tight.

ByteDance and Broadcom have been business partners since at least 2022. The Chinese company has purchased a high-performance 5nm Tomahawk switch chip from US companies as well as Bailly switch for AI computer clusters, Broadcom said in a public statement.

Securing an AI chip is very important for ByteDance to make its algorithm more powerful. Apart from TikTok and a Chinese version of a short video application called Douyin, ByteDance operates a variety of popular applications including a ChatGPT-like chatbot service called Doubao, which has 26 million users.

To support its AI push, ByteDance has stockpiled Nvidia chips, according to a separate source familiar with the matter.

These include the available A100 and H100 chips before US sanctions were first implemented as well as Nvidia's A800 and H800 chips for the Chinese market but were later also restricted, the source said, adding that ByteDance allocated $2 billion for last year's purchase of Nvidia chips.

ByteDance also bought the Ascend 910B chip from Huawei last year, according to two separate sources familiar with the matter.

ByteDance currently has hundreds of job vacancies related to semiconductors posted, including 15 for chip designer ASIC, according to its website checks.

The company also recruited top people from other Chinese AI chip companies, according to one source with direct knowledge of the matter.


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