ByteDance to Begin Making AI Chips Amid Tech War and Global Semiconductor Shortage

Founded in 2012 by Zhang Yiming, ByteDance has surged to the forefront of the international tech scene. (photo source: AFP)

ByteDance has taken initial steps toward manufacturing its own artificial intelligence (AI) chips, a significant development marking further progress in China’s drive to achieve greater autonomy in the field of technology.

Reports of the decision first surfaced on Tuesday after the firm posted a series of online job listings that required skills and experience related to semiconductor manufacturing. ByteDance is a Beijing-based internet technology company that operates the global social media phenomenon TikTok and its domestic counterpart Douyin, among a range of other products.

A statement from the company later confirmed intentions to expand business operations into the field of AI chipmaking, as reported by South China Morning Post.

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The commodities serve as the basic building block of consumer electronics, and the advanced AI chips likely to be manufactured by ByteDance employ complex algorithms and machine learning to carry out a wide range of functions.

The move takes place amid heightened tensions between China and a range of Western governments regarding issues of technology. Disputes between Beijing and Washington DC have been particularly sharp, with the prolonged conflict routinely described as a “tech war“.

In August 2020, restrictions introduced by the US Commerce Department severely complicated the ability of Chinese electronics maker Huawei to access equipment by requiring all foreign chipmakers that use American technology to obtain a license before dealing with the company. The limits, which analysts described as dealing “a lethal blow” to Huawei’s operations, were purportedly motivated by concerns that the firm’s equipment could be used to spy on American citizens, amounting to a national security threat.

The ongoing tech war has made it increasingly difficult for Chinese tech firms to obtain chips from foreign producers. To make matters worse, economic impacts of the COVID-19 pandemic have induced a global semiconductor shortage as manufacturers struggle to catch up with rebounding consumer demand.

In response to these developments, authorities in Beijing have been seeking to reduce domestic technology companies’ dependence on international supply chains, as a greater degree of self-sufficiency would yield both economic and geopolitical advantages.

While Chinese tech companies including Huawei, Lenovo, and Xiaomi have achieved notable success in global markets over past decades, the country’s domestic production of chips required for operation still trails the output of other countries.

Earlier this month, the chief of the Ministry of Industry and Information Technology (MIIT) Xiao Yaqing affirmed that the Chinese government would “vigorously support” domestic chipmakers in order to promote more autonomy in the global semiconductor market.

Founded in 2012 by billionaire entrepreneur Zhang Yiming, ByteDance has surged to the forefront of the international tech scene over recent years. After developing its signature news and content recommendation service Toutiao, the company introduced video-sharing social media platform Douyin in 2016. Later released to foreign markets as TikTok, the wildly popular platform has also become entangled in ongoing disputes between Washington DC and Beijing regarding issues of technology.