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ByteDance (BDNCE), the Chinese firm that owns TikTok, is collaborating with Broadcom (NASDAQ:AVGO) on an advanced AI chip with the aim of securing a stable supply of high-end chips and lowering procurement costs amid China-U.S. trade tensions, two sources told Reuters.
Manufacturing of the 5 nanometer chip, an application-specific integrated circuit that will comply with U.S. export curbs, will be outsourced to Taiwan Semiconductor (TSM).
TSMC (TSM) is not expected to start manufacturing the new chip, which is still being designed, this year. The tape-out, or the final stage of the chip design process before manufacturing, has not begun.
While the companies have not confirmed the partnership, it would be the first between a Chinese company and a U.S. firm involving 5 nm or more advanced chipmaking technology since Washington imposed chip export restrictions amid national security fears.
Because of the curbs, Chinese companies have a limited supply of high-end U.S. chips compared to international peers, at a time when more firms are flocking to generative AI.
A steady supply of AI chips is key for ByteDance (BDNCE), which owns many popular apps including its ChatGPT-like AI chatbot Doubao.
The company stockpiled Nvidia’s advanced chips before U.S. restrictions went into effective, another source told Reuters, and allocated $2B for buying these chips last year. ByteDance (BDNCE) also bought Huawei’s Ascend 910B chips in 2023.