As demand patterns shift across the global technology industry, Qualcomm is exploring new growth opportunities beyond its traditional smartphone business. The company is currently in discussions with ByteDance, the parent company of TikTok, to provide custom chip-design services, according to people familiar with the matter.
If the discussions move forward, ByteDance could become one of the first major customers of Qualcomm’s chip-design services business. Qualcomm is widely known as the world’s largest supplier of smartphone modem chips, which manage cellular communications in mobile devices.
The talks highlight continued business engagement between U.S. and Chinese technology companies despite growing tensions over advanced AI and semiconductor technologies. The discussions reportedly focus on developing custom chips for ByteDance, with part of the design expected to leverage technology from AlphaWave Semi, a high-speed connectivity specialist acquired by Qualcomm last year.
Sources indicated that the negotiations are still ongoing and there is no certainty that they will result in a final chip design or commercial manufacturing agreement. ByteDance may also explore partnerships with other chip providers.
One source said the discussions include the development of Video Processing Units (VPUs), with a goal of beginning mass production by the end of the year. ByteDance has previously been reported to be working on AI inference chips and custom Central Processing Units (CPUs) to strengthen its technology capabilities.
Neither Qualcomm nor ByteDance has publicly commented on the reported discussions.
A potential agreement would represent an important opportunity for Qualcomm as it seeks to reduce reliance on the smartphone market, which remains its largest source of revenue. Smartphone manufacturers have faced uncertainty this year due to rising memory chip costs, while global smartphone shipments are expected to record their steepest annual decline on record.
At the same time, Qualcomm is expanding its presence in the rapidly growing data centre and AI chip markets. The company is developing CPUs, AI inference accelerators, and Application-Specific Integrated Circuits (ASICs), competing in a segment that has seen strong growth for established industry players.
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