Prime Highlights
- Qualcomm is in talks with ByteDance to develop custom chips, potentially making the Chinese technology company an early customer of its chip design services business.
- The discussions reportedly include video processing units, with mass production being considered by the end of the year.
Key Facts
- Qualcomm is the world’s largest supplier of smartphone modem chips and is expanding into custom chip design and data center markets.
- ByteDance is the parent company of TikTok and has been developing AI-related semiconductor technologies.
Background
Qualcomm is in discussions with China’s ByteDance to provide custom chip design services, according to people familiar with the matter. If the talks result in an agreement, ByteDance would become one of the first customers of Qualcomm’s expanding chip design services business as the company looks to reduce its reliance on the smartphone market.
Sources said Qualcomm is discussing the development of custom chips for ByteDance. The proposed chips could incorporate technology from AlphaWave Semi, a high-speed connectivity company that Qualcomm acquired last year. While the discussions are still going, the overall result stays unclear, and there’s no real guarantee the talks will end up in a final chip design or a production agreement.
One source said the discussions involve video processing units (VPUs), with the goal of starting mass production by the end of the year. ByteDance has also been reported to be developing artificial intelligence chips for inference workloads and custom central processing units.
The possible acquisition will be significant for Qualcomm in its search for future opportunities other than smartphones, which have been its biggest income stream thus far. It has experienced challenges due to the decline in the smartphone market and concerns among device manufacturers over escalating prices of memory chips.
The ongoing talks further show the business relationship that still exists between US tech companies and Chinese companies despite growing conflict between Washington and Beijing concerning advanced semiconductor technology.
Qualcomm has been making efforts towards increasing its footprint in the data center chip market through collaboration with customers over central processing units (CPUs), AI inference accelerators, and application-specific integrated circuits (ASICs). These areas have emerged as promising segments in the semiconductor industry with the rise in AI infrastructure requirements.
