It is reported that in order to obtain sufficient high-end chip supply, ByteDance is cooperating with American chip design company Broadcom to develop an advanced AI processor.

According to insiders, the two sides will collaborate to customize a dedicated integrated chip (ASIC) that will comply with US chip export restrictions. This customized product will be manufactured by TSMC and is expected to use 5nm technology process.

It is worth noting that since the introduction of cutting-edge semiconductor export controls in the United States in 2022, Chinese and American companies have not publicly announced chip development cooperation involving 5nm or more advanced technologies. Transactions between China and the United States in this field typically involve less complex technologies.

People familiar with the matter said that the cooperation between ByteDance and Broadcom would help reduce procurement costs and ensure the stable supply of high-end chips.

Regarding the project progress, informed sources have revealed that the design work is currently progressing smoothly, but it has not yet reached the stage of tape out (referring to delivery for manufacturing), which means that TSMC has not yet started participating in production. Sources also stated that TSMC is not expected to start producing this new chip this year.

In addition, according to the ByteDance website, the company has released hundreds of semiconductor related vacancies, including 15 ASIC chip designer positions.

Like other global technology companies, ByteDance is also vigorously promoting the investment in generative AI, but this company and other Chinese technology enterprises are facing the problem of limited supply of high-end AI chips.

This cooperation is the latest effort of ByteDance to expand its chip storage. ByteDance and Broadcom have been business partners since 2022 at least. According to the public statement of Broadcom, ByteDance has purchased Broadcom's Tomahawk 5nm high-performance switch chip and Bailly switch for AI computer cluster.

Ensuring AI chip availability is critical for ByteDance to enhance its algorithm. In addition to TikTok and Tiktok, ByteDance also operates a series of popular applications, including the recently launched chat robot service "Doubao", which currently has at least 26 million users.

This chat robot is based on the big model of beanbag announced in May this year by ByteDance. The model has attracted a lot of attention since its launch due to its ultimate cost-effectiveness. It is reported that the main model of Doubao is priced at only 0.0008 yuan/thousand tokens in the enterprise market, which can process more than 1,500 Chinese characters at 0.8 millimeters, which is 99.3% cheaper than the industry price.

Under the condition that the U.S. government restricts the export of chips, ByteDance can also launch such a large model that is competitive in both performance and price, mainly thanks to the support of a large number of chips previously stored by the company.

According to another informed source, in order to support its AI development, ByteDance has reserved many NVIDIA chips, including A100 and H100 chips purchased before the first round of US sanctions, and A800 and H800 chips produced by NVIDIA for the Chinese market but later restricted. The source added that last year alone, ByteDance allocated nearly $2 billion to buy NVIDIA chips.

People familiar with the matter also revealed that in order to prevent the US government from further stepping up the production of chip exports, ByteDance also purchased Huawei's Ascend 910B chip last year.