TikTok’s parent company ByteDance is assessing the viability to build its own semi-conductors for internal applications and meet the computing needs of its own services to become more self-sufficient in critical technology.
Bytedance says the move is a result of a lack of suppliers with specialized chips that meet their requirements. The chips will be customized to deal with workloads related to ByteDance’s multiple business areas including video platforms, information and entertainment apps, a ByteDance spokesperson told CNBC.
ByteDance has previously focused on building and running applications including hardware moves before. With the chips, they won’t be manufacturing chips for sale to other companies. ByteDance is also exploring ways into AR, VR, and nascent metaverse space through a range of investments that include the company’s previous purchase of VR headset company PICO in 2021.
ByteDance joins companies such as search giant Baidu, Apple, Facebook, Tesla and Alibaba who have shifted to in-house chips ditching over-the-counter ones.
Why are companies ditching external semi-conductor sources to manufacture their own?
Over the past year, we had many tech giants including Apple explore ways to make their own semiconductors to meet the ever-growing demand for products while some, out of the inspiration of other successful brands that have achieved to make their own chips. .
There are many reasons why a business outside of the semiconductor industry may decide to create its own chips, including supply chain resilience and control over intellectual property.
“Companies are discovering that the right balance of hardware and software can be differentiating, which usually means they can’t use the same commercial solution being used by everyone else in their industry segment,” said Shiv Tasker, global head, semiconductors, and electronics, for engineering consulting firm Capgemini Engineering in a previous interview by the Information week blog.
Further, he added, “Organizations want to emulate their market leaders who, by designing their own chips, and more of the chip software, are able to control more of their products and brand’s differentiation, user experience, and supply chain — often giving them a huge margin advantage over their competition.”
The recent US, China wars on semi-conductors that saw huge brands such as Huawei embattled in the wars have also pushed for most tech giants to adapt their own chips to be more self-sufficient.