Tensions created by the U.S. trade sanctions likely forced TikTok owner ByteDance to form a business partnership with Broadcom as the Chinese internet company reportedly seeks to develop an AI chip. It is said that this particular chip will be mass produced on TSMC’s 5nm technology, though it should be noted that any company of Chinese origin is barred from working with the Taiwanese semiconductor manufacturing giant, with Huawei being the most notable entity.
ByteDance aims to mass produce an ASIC, which is allowed under the U.S. trade sanctions
Just recently, we reported that Washington-based Optica Foundation was forced to cut ties with Huawei, likely due to continuous pressure from U.S. authorities. Based on this report alone, it is puzzling how ByteDance secured a partnership with Broadcom, also a U.S. firm. According to Reuters, the parent company of TikTok found a clever loophole in the trade sanctions’ fine print, as it has proceeded to develop a customized application-specific integrated chip, or ASIC, which is compliant with U.S. export restrictions. TSMC is expected to handle the manufacturing work.
As for why ByteDance is said to have formed a business relationship with Broadcom, it would help the company reduce its chip costs while ensuring a steady supply when required. Unfortunately, two people familiar with the company’s plans have stated that TSMC is not expected to start production this year, but the design work is underway. The ‘tapeout’ stage is yet to be reached, suggesting that the manufacturing phase will take a while to commence. ByteDance likely steered clear from partnering with another Chinese firm due to the limited AI chip supply compared to overseas suppliers.
Securing these advanced AI chips is mandatory for ByteDance as it will allow the company to develop more robust and powerful algorithms for apps like TikTok and the short video application called Douyin. The internet giant also operates a ChatGPT-like chatbot service called Doubao, so developing a new AI chip should boost its capabilities too. For now, ByteDance has stockpiled A100, H100, A800, and H800 chips from NVIDIA, with the first two purchased before the U.S. introduced trade sanctions.
The TikTok owner also purchased Huawei’s Ascend 910B chips last year. To help with its AI push, ByteDance has opened up several semiconductor-related job openings, including 15 for ASIC chip designers, with its other plans revolving around poaching talent from other Chinese AI chip firms. It is unclear how the Biden administration will react to this news, but seeing as how developing an ASIC is allowed under the trade rules, it will probably amend those bullet points in the future.
News Source: Reuters
