ByteDance, the Chinese tech giant, has requested custom artificial intelligence (AI) chips from Taiwan's fabless semiconductor company MediaTek for its data centers. This move comes as ByteDance faces challenges due to U.S. export controls and limitations in the supply of Chinese-made chips.
Bloomberg reported on October 15, citing sources, that ByteDance is on the verge of finalizing a contract with MediaTek for the purchase of custom semiconductors. MediaTek plans to supply application-specific integrated circuits (ASICs) tailored to the needs of its clients' platforms. If the deal is completed, ByteDance will become MediaTek's second customer for such ASICs, following Google.
ASICs are semiconductors designed for specific applications. When applied in AI data centers, they can optimize computations differently than general-purpose graphics processing units (GPUs), reducing costs and power consumption. For ByteDance, which operates large-scale AI services, securing chips tailored to its needs means improved computational efficiency.
The negotiations highlight the constraints within China's AI semiconductor supply chain. Like other major Chinese tech firms such as Alibaba and Tencent, ByteDance has struggled to secure sufficient quantities of Nvidia's advanced AI chips. While companies like Huawei are developing AI accelerators, meeting the surging demand from big tech firms solely with domestic supply remains a challenge. The complexity of advanced chip manufacturing processes, along with the need for high-bandwidth memory (HBM), packaging, and a robust software ecosystem, adds to the difficulty.
As a result, the collaboration between ByteDance and MediaTek illustrates the limitations of China's semiconductor self-sufficiency. Although Chinese companies are pursuing the development of their own AI chips, they still face significant hurdles in achieving the performance, volume, and cost competitiveness required for large-scale data center deployment.
Additionally, Reuters reported in June that Qualcomm had also discussed providing chip design services to ByteDance. It appears that after engaging with Qualcomm, ByteDance ultimately chose to partner with MediaTek.
* This article has been translated by AI.
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