TikTok hires staff: wants to produce chips

ByteDance, owner of the social TikTok, has published an ad: electronic and computer engineers wanted.

After former U.S. President Donald Trump's bans against Huawei and many other Chinese electronics companies, not yet removed by successor Joe Biden, China is struggling to find reliable manufacturers of chips of all kinds: from CPUs to GPUs, via SoCs for smartphones. The Chinese government's solution is clear: produce everything at home. Among the local giants that would have adhered to the state appeal there would be also ByteDance, owner of the well-known social network Tiktok.

ByteDance, in particular, would be organizing itself to produce processors for servers with ARM architecture, the same used on smartphones and on the recent Apple Silicon M1 processors of the new MacBooks. The news is not official, but very credible because the company actually needs to grow with hardware as its TikTok platform grows and, above all, because it has posted job ads unequivocally related to semiconductor manufacturing: electronic engineers, software engineers and other similar figures. China's tech giants, then, are stepping up their efforts to design and build their own chips and reduce their dependence on foreign manufacturers such as Qualcomm and Nvidia.

China in hot pursuit

China is now the world's largest buyer of semiconductors because its capacity to produce highly sophisticated chips is significantly less than that of the United States, Japan and South Korea.

According to research firm ICInsights, of the approximately $143 billion worth of chips sold in China in 2020, only $22.7 billion were made in China and only $8.3 billion were produced by Chinese companies. That's why, in addition to Huawei and ByteDance, many other Chinese tech companies are scrambling to increase their chip production or start one from scratch.

Another example is Baidu, China's Google, which just raked in $2 billion in funding to build production lines for its Kunlun AI chips for artificial intelligence. Baidu is also reportedly planning to make the branch of the company that will produce the processors autonomous, to shield it from any American retaliation (just as Huawei has already done by selling Honor).

Another Chinese giant, Alibaba Group famous for its huge e-commerce, already unveiled a line of chips for artificial intelligence in late 2019.

What the Chinese lack

As much as they may strive to become autonomous in the semiconductor field, however, the Chinese have a major limitation: the manufacturing process. That is, the famous nanometers (or "nm", as it is often read) that characterize the final size of a chip: the more refined (and therefore "with less nm") the production process is, the more you can make processors that are small and consume less.

The leaders in machinery to produce semiconductors, and therefore the leaders in chip production processes, however, are the Americans. China can no longer buy such machinery from America and will have to make it at home, which, in practice, means that China will have to catch up with several years' worth of machinery sooner rather than later.

Something that, the Americans hope, will result in a subsequent lag in the processor sector.