Qualcomm in Talks to Provide Custom Chip Design Services to ByteDance

Jun 24, 2026

Qualcomm is in talks to provide custom chip-design services to China's ByteDance, a move to reduce its dependence on the shrinking smartphone market. The potential deal involves designing video processing units (VPUs) and would make ByteDance an early customer for Qualcomm's new service. The negotiations persist despite growing US-China tech friction that has impacted firms like Nvidia.

Qualcomm-ByteDance chip design negotiations

▪If the negotiations are successful, ByteDance would become an early customer for Qualcomm's chip-design services.
▪The outcome of the discussions between Qualcomm and ByteDance remains uncertain, and ByteDance could pursue other partners.
▪Qualcomm and ByteDance did not respond to requests for comment regarding the talks.
▪Qualcomm is in talks with China's ByteDance to provide custom chip-design services.

Custom chip specifications

▪One source indicated the discussions involve designing video processing units (VPUs) for ByteDance.
▪The goal for the potential VPU chip is to begin mass production by the end of 2026.
▪ByteDance is also developing its own AI chip for inference tasks and custom central processing units (CPUs).
▪The potential custom chips for ByteDance would be based partly on technology from AlphaWave Semi, a company Qualcomm acquired in 2025.

Qualcomm diversification strategy

▪Qualcomm is pursuing new business to reduce its dependence on the smartphone market, its largest revenue source.
▪Global smartphone shipments are projected to show their steepest annual contraction on record in 2026.
▪Qualcomm is working to enter the data center chip market, where its rivals in the custom ASIC segment include Broadcom and Marvell.
▪Qualcomm is the world's largest supplier of smartphone modem chips.

US-China tech business relations

▪Growing friction between Washington and Beijing over AI chips has already impacted U.S. firms like Nvidia, AMD, and Applied Materials.
▪The talks suggest U.S. tech firms are still keen to do business with China despite growing geopolitical friction.