ByteDance, the Chinese company that owns TikTok, is planning to start developing its own semiconductors, Reuters reports.
Why It Matters: “Chinese technology giants are stepping up efforts to design their own chips in a sign of China’s ambitions to reduce its dependence on foreign producers such as Qualcomm Inc and Nvidia Corp.”
- It’s also important to mention the tense relationship with the U.S., which put sanctions on Huawei and crippled the Chinese telecom giant by blocking its ability to source chips.
- China is the world’s biggest buyer of semiconductors, but it can’t make them as well as Japan, South Korea or the U.S.
Numbers To Consider (per ICInsights):
- $143 Billion in chips were sold in China during 2020.
- $22.7 Billion were produced in China.
- $8.3 Billion were produced by Chinese-headquarter firms.
Bytedance isn’t the only one trying. Chinese search engine Baidu just raised funding for its “Kunlun AI chip unit,” which has an estimated value of $2 billion. Alibaba “unveiled an AI chip for its cloud computing products in late 2019.” Chinese AI unicorn SenseTime is now working on its own chips after landing on a U.S. trade list in 2019.
The Outlook: The plan is still in its early stages and is taking a hard look at how Arm builds its server-side chips. ByteDance has posted a series of semiconductor-related job opportunities on its website and previously told Chinese business magazine Caijing that it “has established a team to explore the development of artificial intelligence chips.”
Another step forward in the China vs U.S. Technological Cold War…