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ByteDance collaborates with Broadcom to develop an AI chip using TSMC’s 5nm process

ByteDance, the parent company of TikTok, has announced a collaboration with Broadcom to develop an advanced AI chip that will be produced using TSMC’s 5nm technology. This move is partly in response to tensions created by U.S. trade sanctions, pushing the Chinese company to seek new partnerships to continue innovating in the field of artificial intelligence (AI).

According to reports, ByteDance aims to mass-produce an ASIC (Application-Specific Integrated Circuit), a type of customized chip that complies with U.S. export restrictions. This strategic choice could explain how ByteDance managed to establish a partnership with Broadcom despite strict sanctions that prevent Chinese companies from collaborating directly with entities like TSMC. The chip will be manufactured by TSMC, one of the world’s leading semiconductor foundries.

The collaboration with Broadcom is seen as a way for ByteDance to reduce chip costs and ensure a steady supply. However, two sources familiar with the company’s plans have stated that production by TSMC will not start this year, as the project has not yet reached the "tapeout" stage, a crucial step before production begins. ByteDance likely avoided partnering with another Chinese firm due to the limited AI chip supply compared to overseas suppliers.

Securing advanced AI chips is essential for ByteDance as it will enable the development of more robust and powerful algorithms for applications like TikTok and Douyin, the Chinese version of TikTok. The company also operates a ChatGPT-like chatbot service called Doubao, and the development of a new AI chip should further enhance its capabilities. Currently, ByteDance has stockpiled A100, H100, A800, and H800 chips from NVIDIA, purchased before the U.S. trade sanctions were introduced, and last year also purchased Huawei’s Ascend 910B chips.

To support its AI push, ByteDance has opened several semiconductor-related job openings, including 15 for ASIC chip designers. Additionally, it is looking to attract talent from other Chinese AI chip firms. It is unclear how the Biden administration will react to this news, but seeing as developing an ASIC is allowed under current trade rules, these regulations might be revised in the future.

Highlights:

• ByteDance-Broadcom collaboration: development of an advanced AI chip using TSMC’s 5nm process.
• Response to trade sanctions: ByteDance finds a loophole in U.S. restrictions.
• Mass production expected: not starting this year, but the project is in development.
• Implications for apps: improvement of TikTok, Douyin, and Doubao through new AI algorithms.