US chip designer Broadcom is reportedly in discussions with ByteDance, TikTok’s Chinese parent company, to develop a new 5-nanometer purpose-built chip, according to Bloomberg, citing a source familiar with the matter. This collaboration aims to help ByteDance procure high-end chips amid a tech war between the US and China. 

The people said Broadcom and ByteDance have yet to strike a deal on the new chip, adding that the US chip designer is already supplying legacy 7nm AI processors to the Chinese company’s data centers.

In a separate report, a Reuters source revealed that the 5nm purpose-built chip would comply with US export restrictions if the deal is finalized. The manufacturing work for this new chip would be outsourced to Taiwan’s Taiwan Semiconductor Manufacturing Company Limited.

Since Washington slapped chip export controls on China in recent years, there have been no publicly announced chip development collaborations between Chinese and US firms for 5nm or below chips.

In March, Broadcom told investors it secured a new customer for its AI accelerator business and would be shipping products to this client in the near term. However, it did not disclose the company’s name.

The people told Reuters that ByteDance’s tie-up with Broadcom and possible future procurement of 5nm chips allow it to reduce costs and ensure a stable supply of higher-end chips. 

The source said TSMC is not expected to begin production of advanced chips this year, adding design work is well underway. 

Securing AI chips is crucial for ByteDance’s algorithms, which power TikTok and the Chinese video app Douyin. The company also has a popular ChatGPT-like chatbot service called Doubao, which has tens of millions of users.

TikTok parent’s talks with Broadcom is to ensure that it will keep pace with US rivals, such as Meta Platforms, Microsoft, and Alphabet’s Google, as the AI infrastructure race gains momentum.