Qualcomm in talks with ByteDance on custom video chips

Qualcomm Inc. is in discussions to provide custom chip-design services to ByteDance, the Chinese parent company of TikTok, according to sources familiar with the matter. The negotiations, which are ongoing but not finalized, represent a strategic push by the U.S. semiconductor giant to diversify its revenue beyond the struggling smartphone market.

The talks involve designing custom chips, specifically video processing units (VPUs), tailored for ByteDance's massive data center workloads in handling its short-form video platform. The proposed chips would be based in part on technology from AlphaWave Semi, a high-speed connectivity specialist that Qualcomm acquired last year. One source indicated the aim is to begin mass production by the end of 2026, though the outcome remains uncertain and ByteDance could still choose a different partner.

A successful deal would make ByteDance an early anchor customer for Qualcomm's burgeoning chip-design services division. This move is part of a broader diversification strategy led by CEO Cristiano Amon to reduce the company's heavy reliance on smartphone modem chips, where it is the world's largest supplier. The smartphone market is under...