Qualcomm in talks with ByteDance for custom chip design as it pushes beyond smartphones

Qualcomm in talks to provide custom chip-design services to ByteDance, sources say

June 24 (Reuters) - Qualcomm (QCOM.O), opens new tab is in talks to provide chip-design services to China's ByteDance, four people familiar with the matter said, as the U.S. company seeks to reduce dependence on the smartphone market, its biggest revenue source. If successful, the negotiations would make ByteDance, the parent of short-video platform TikTok, an early customer of Qualcomm's chip-design services operation. Qualcomm is the world's largest supplier of smartphone modem chips, which manage cellular communications. The talks also show that U.S. tech firms remain keen to do business with China, even as growing friction between Washington and Beijing over AI chips has ⁠impacted the likes of Nvidia (NVDA.O), opens new tab, AMD (AMD.O), opens new tab, Applied Materials (AMAT.O), opens new tab and Lam Research (LRCX.O), opens new tab. Qualcomm is discussing designing custom chips for ByteDance, according to three of the sources. The chips would be based in part on technology owned by AlphaWave Semi, a high-speed connectivity specialist Qualcomm acquired last year, two of the sources said. While the discussions are underway, the outcome remains uncertain, three sources said. It was not clear whether the talks would lead to a finished chip design and manufacturing, and ByteDance could pursue different partners, they said. Other details about the chip were not immediately clear. ⁠One of the sources said the discussion involves the designing of video processing units (VPUs), with an eye toward starting mass production by the end of the year. Reuters reported earlier that ByteDance is developing an AI chip for inference tasks and custom central processing units (CPUs). Qualcomm and ByteDance did not respond to requests for ⁠comment. The sources spoke on condition of anonymity because the discussions are private. A deal with ByteDance would be a significant win for Qualcomm, which has faced uncertainty from smartphone makers this year due to a surge in ⁠memory-chip prices. Global smartphone shipments are likely to show the steepest annual contraction on record this year. Qualcomm is working to break into the booming data center chip market and working with ⁠customers on three kinds of chips: CPUs, accelerators for inference, and custom chips called ASICs, a fast-growing market for rivals such as Broadcom (AVGO.O), opens new tab and Marvell (MRVL.O), opens new tab. Reporting by Max A. Cherney, Fanny Potkin, Wen-Yee Lee and Liam Mo; Editing by Miyoung Kim and David Dolan Our Standards: The Thomson Reuters Trust Principles., opens new tab

Qualcomm in talks to design custom chips for ByteDance

Qualcomm, the king of the smartphone modem, is in talks to design custom chips for ByteDance. The move would help it escape a shrinking phone market. It also shows US chipmakers will not give up on China. Qualcomm wants to be a chip designer for the AI age. Its first big customer could be Chinese. The company is in talks to provide custom chip-design services to ByteDance, the owner of TikTok. Four people familiar with the matter told Reuters. If it lands, ByteDance would become an early customer of a business Qualcomm is only now building out. The logic runs two ways at once. Qualcomm needs a future beyond the smartphone. A Chinese internet giant needs chips it can no longer easily buy from America. That is the real story here. What is on the table The talks centre on Qualcomm designing custom chips for ByteDance, according to three of the sources. The parts would draw in part on technology from AlphaWave Semi. Qualcomm bought the high-speed connectivity specialist last year for about $2.4bn. One source said the talks involve video processing units, aiming for mass production by year-end. The two sides have signed nothing. The outcome remains uncertain, three of the sources stressed. It is unclear whether the talks will lead to a finished design and manufacturing. ByteDance could still pick a different partner. Qualcomm and ByteDance declined to comment. For now this remains a negotiation, not a deal, and the gap between the two often runs wide. It does not come from nowhere, though. Earlier reporting put the two sides in deeper talks over a much larger supply of inference ASICs, the custom accelerators that run trained AI models. The design-services angle adds the next layer: not just selling ByteDance chips, but helping it build its own. That distinction matters, because it moves Qualcomm from vendor to partner. Why Qualcomm needs a new act Qualcomm has a smartphone problem. It dominates modem chips, the parts that handle cellular signals, and phones still bring in most of its revenue. That market is now shrinking. Global smartphone shipments are on course for their steepest annual fall on record this year, as a surge in memory-chip prices unsettles handset makers. So Qualcomm is racing into the data centre. It now courts customers across three kinds of chip: CPUs, accelerators for inference, and the custom ASICs that hyperscalers increasingly design in-house. That last market is booming, and Broadcom and Marvell dominate it. The two firms turn a cloud giant's chip ideas into working silicon. Smaller players, including a wave of well-funded startups, are chasing the same business. Qualcomm wants in, and a marquee customer would prove it belongs. ByteDance would be exactly that. A win here would give Qualcomm a flagship name for a division it is still trying to establish. It would also pad out a portfolio that has leaned on tuck-in deals, including the AlphaWave purchase, since US regulators sank its planned takeover of NXP Semiconductors years ago. Why ByteDance is shopping ByteDance has a problem too, and it mirrors Qualcomm's. It needs vast amounts of chips to run its AI products, and Nvidia's most powerful accelerators remain largely off-limits in China under US export rules. So it builds a homegrown supply chain instead. That effort already runs wide. ByteDance designs its own CPUs on Arm and RISC-V to feed its data centres, and weighs orders from a string of domestic chipmakers for inference work. Inference is the lighter task of running models for users, rather than the heavy lifting of training them. Chinese alternatives also come closest to good enough there, which is why so much of the shopping targets that workload. ByteDance has weighed orders from domestic names such as Biren, MetaX, Iluvatar CoreX, Moore Threads and Enflame, and has held manufacturing talks with Samsung over an inference chip of its own. Qualcomm would slot into a crowded, deliberately diversified roster. Qualcomm fits that picture neatly. American design know-how offers a useful bridge while domestic options mature. Pair it with parts tuned for the inference jobs China most needs to cover, and the appeal grows obvious. A deal on a political tightrope The timing is the awkward part. Washington and Beijing keep escalating their fight over AI chips. It has already hit Nvidia, AMD, Applied Materials and Lam Research as export rules tighten. Designing advanced chips for a Chinese champion, in that climate, makes for anything but a quiet commercial decision. Yet the talks show how much US firms still want Chinese revenue. The pull of the market keeps drawing them back, even as the politics turn hostile, and ByteDance keeps finding willing partners. The export regime mostly polices finished high-end chips, which leaves design services and inference-grade parts in a greyer zone. That ambiguity is exactly what the broader shift toward custom ASICs in China has learned to exploit. The case for caution This is still a long way from silicon. The discussions could collapse, the design might never reach manufacturing, and ByteDance is plainly keeping its options open with several suppliers at once. A year-end production target is ambitious for a chip that has not been finalised. Any of those threads could snap. Politics could snap them faster. A fresh turn of the export screw, on either side, could put a Qualcomm-ByteDance project out of reach before it ships. The same friction that makes the deal attractive to ByteDance is what makes it fragile. Both sides know it. None of that makes the strategy wrong. Qualcomm has read the room: phones are fading, AI silicon is where the growth is, and customers shut out of Nvidia are hungry for alternatives. So the open question is not whether Qualcomm should chase this business. It is whether it can build a new identity as the designer of other companies' chips while its most promising customers sit on the wrong side of a widening political line. The smartphone era made Qualcomm. The AI era will test whether it can reinvent itself fast enough, and with whom.

Qualcomm in talks to provide custom chip-design services to ByteDance

US chip giant Qualcomm is reportedly in talks with Chinese tech behemoth ByteDance, parent of TikTok, to design custom chips. This move signals Qualcomm's bid to diversify beyond its core smartphone market and highlights continued US-China tech business engagement despite geopolitical tensions. The potential deal could involve video processing units, leveraging Qualcomm's recent acquisition of AlphaWave Semi. While discussions are ongoing, the outcome remains uncertain. Qualcomm is in talks to provide chip-design services to China's ByteDance, four people familiar with the matter said, as the US company seeks to reduce dependence on the smartphone market, its biggest revenue source. If successful, the negotiations would make ByteDance, the parent of short-video platform TikTok, an early customer of Qualcomm's chip-design services operation. Qualcomm is the world's largest supplier of smartphone ⁠modem chips, ⁠which manage cellular communications. The talks also show that US tech firms remain keen to do business with China, even as growing friction between Washington and Beijing over AI chips has impacted the likes of Nvidia, AMD, Applied Materials and Lam Research. Qualcomm is discussing designing custom chips for ByteDance, according to three of the sources. The chips would be based in part on technology owned by AlphaWave Semi, a ⁠high-speed connectivity specialist Qualcomm acquired last year, two of the sources said. While the discussions are underway, the outcome remains uncertain, three sources said. It was ⁠not clear whether the talks would lead to a finished chip design and manufacturing, and ByteDance could pursue different partners, they said. Other details about the chip were not immediately clear. One of the sources said the discussion involves the designing of video processing units (VPUs), with an eye toward starting mass production by the end of the year. Reuters reported earlier that ByteDance is developing an AI chip for inference tasks and custom central processing units (CPUs). Qualcomm and ByteDance did not respond to requests for comment. The sources spoke on condition of anonymity because the discussions are private. A deal with ByteDance would be a significant ⁠win for Qualcomm, which has faced uncertainty from smartphone makers this year due to a surge in memory-chip prices. Global smartphone shipments are likely to show the steepest annual contraction on record this year. Qualcomm is working to break into the booming data center chip market and working with customers on three kinds of chips: CPUs, accelerators for inference, and custom chips called ASICs, a fast-growing market for rivals such as Broadcom and Marvell.

Qualcomm Reportedly Helping China's ByteDance With Custom Chip Design Services, Also Acquires Modular To Accelerate Its Unified Compute Strategy

Qualcomm is expanding its chip-design services to China as it is reportedly in early talks with ByteDance. China's ByteDance To Get Custom-Chip Design Assistance From Qualcomm As It Expands Its Revenue Beyond Smartphones Custom-chip designs are picking up momentum across the tech industry, and a report by Reuters suggests that Qualcomm might be assisting ByteDance, a leading Chinese firm, with chip-design services. Although the talks between Qualcomm and ByteDance are still early, if they succeed, then that would make ByteDance one of the first customers of Qualcomm's chip-design services. The move will also help Qualcomm diversify its revenue, breaking its shackles from a smartphone-focused chipmaker to a service provider in the chip-making business. Qualcomm is in talks to provide chip-design services to China's ByteDance, four people familiar with the matter said, as the U.S. company seeks to reduce dependence on the smartphone market, its biggest revenue source. via Reuters Qualcomm has slowly been entering various markets with the likes of its X Elite lineup for AI PCs, and its most recent teaser of datacenter-oriented chips. Now, further diversification is expected through chip-making deals. The ByteDance talks show that US firms are willing to talk with China-based firms despite the US-China relations being in hot water, only somewhat lightened by the recent Trump-Xi meetup. Early details regarding the custom chip suggest that they will be based on AlphaWave Semi's tech, a company that was acquired by Qualcomm last year. There is also talk about designed VPUs, & production is expected as early as this year's end. In addition to this, Qualcomm also announced its acquisition of Modular, a company whose goal is to build the world's first unified compute platform, unlocking a more open, efficient, & hardware-independent ecosystem for future AI workloads. This shows that Qualcomm is serious about expanding into more segments, and data centers are looking to be its next major goal. This announcement comes just a few hours ahead of Qualcomm's Investor Day 2026, where the company is going to talk about its future endeavors and give its investors a look at future plans for chips, products, and platforms. Follow Wccftech on Google to get more of our news coverage in your feeds.