The U.S. chipmaker is reportedly discussing a custom semiconductor project with ByteDance as it seeks to expand beyond smartphones and strengthen its presence in AI and data-center markets.
Qualcomm is in talks with China’s ByteDance over a potential custom chip development partnership, according to people familiar with the matter, as the U.S. chipmaker looks to reduce its reliance on the smartphone market and expand into new areas of semiconductor design.
The discussions involve Qualcomm potentially designing specialized chips for ByteDance, the parent company of TikTok. If a deal is reached, ByteDance would become one of the first customers of Qualcomm’s emerging chip-design services business, marking a significant step in the company’s diversification strategy.
Sources said the proposed chips could incorporate technology from AlphaWave Semi, the high-speed connectivity specialist Qualcomm acquired last year. One person familiar with the matter said the talks are focused on video processing units (VPUs), with the possibility of moving toward mass production by the end of the year.
However, the negotiations remain ongoing and there is no certainty that they will result in a final agreement. ByteDance could ultimately choose another partner or pursue alternative chip-development plans.
The potential partnership comes as Qualcomm seeks new growth avenues beyond smartphones, which remain its largest source of revenue. The global handset industry has faced pressure this year from rising memory-chip prices and weakening demand, prompting suppliers to broaden their focus.
Qualcomm has increasingly targeted the fast-growing data-center and artificial intelligence markets. The company is developing products across several categories, including central processing units (CPUs), AI inference accelerators and custom application-specific integrated circuits (ASICs), a market where competitors such as Broadcom and Marvell have gained significant traction.
The talks also underscore the continued commercial engagement between U.S. and Chinese technology companies despite ongoing geopolitical tensions and export restrictions affecting parts of the semiconductor industry.
Neither Qualcomm nor ByteDance commented on the reported discussions. Sources familiar with the matter said the negotiations remain private and the outcome is still uncertain.
