South Korea’s fabless AI chip trade noticed a slew of fundraising occasions over the past couple of years as demand for {hardware} to energy AI functions skyrocketed, and it appears the house is already consolidating. Two of the nation’s distinguished fabless AI chip startups, Rebellions and Sapeon, have agreed to merge, the businesses mentioned on Wednesday.
The merger is a strategic transfer by Rebellions and Sapeon aimed toward main the fabless AI chip market in South Korea to tackle international rivals like Nvidia. Fabless chip makers give attention to analysis and growth, design and advertising of chips, reasonably than manufacturing.
The merged entity might go public within the subsequent two to a few years, in accordance with two trade sources conversant in the businesses’ plans who requested to not be named.
The businesses mentioned in an announcement that they see the following two to a few years as a “golden hour” for South Korea to win the worldwide AI chip market. As well as, as a result of quickly growing demand for neural processing models (NPUs), they intend to strengthen their NPU enterprise after the merger.
Certainly, the deal comes at a pivotal second within the international chip trade.
Nvidia at present dominates this market, accounting for greater than 97% of the worldwide marketplace for specialised AI chips, due to its early leap into offering information heart providers and software program to assist different corporations construct giant language fashions and energy AI functions. Nonetheless, for corporations like Rebellions and Sapeon, there may be sufficient floor to be gained by shifting now: Compute is getting costlier as demand has shot up and chip availability has declined, and AI corporations are already attempting to interrupt away from their dependence on Nvidia for {hardware}.
Apple final month mentioned it will be utilizing its personal chips to energy its AI information facilities, and others like Google, Amazon and Microsoft are already constructing their very own {hardware} for AI functions. In the meantime, Intel, AMD, Google, Meta, ARM, Broadcom and others have banded collectively to develop a regular to attach AI accelerator chips utilized in servers, in a transfer going instantly in opposition to Nvidia, which has its personal mechanism for connecting GPUs in servers.
The way in which forward
Rebellions and Sapeon didn’t disclose the merger ratio, however mentioned they may quickly start due diligence, which is able to take a few month, and goal to shut the transaction within the second half of 2024. The Rebellions workforce will lead the administration of the enterprise, and all staff of each corporations shall be becoming a member of the brand new entity. Rebellions has 130 workers, and Sapeon has greater than 100 staff in South Korea and the U.S.
Two of South Korea’s greatest telecommunications corporations, SK Telecom and KT, will proceed as stakeholders within the merged entity, as will the second largest reminiscence chip maker on the planet, SK Hynix. Sapeon is backed by SK Telecom and SK Hynix, and Rebellions is owned by KT.
Rebellions confirmed that it’ll proceed its partnership with Samsung Electronics, which competes with SK Hynix within the semiconductor house, for ongoing tasks, together with Insurgent. Earlier this 12 months, Rebellions advised Trendster that the startup’s newest AI chip, Insurgent, would use Samsung’s 4-nanometer fabrication course of and be deployed in Samsung’s HBM3E reminiscence chips, that are used for constructing and working giant language fashions.
In the meantime, KT in 2023 integrated Atom, Rebellions’ information center-focused AI chip, into its cloud-based NPU infrastructure. Rebellions mentioned it will manufacture this explicit NPU chip utilizing Samsung’s 5-nanometer fabrication course of. Atom is designed for information facilities and language fashions of as much as 7 billion parameters, whereas Insurgent targets bigger fashions.
The announcement comes roughly 4 months after Rebellions raised a $124 million Collection B that valued it at roughly $658 million.
Based in 2016 and spun out in 2022 from SK Telecom, Sapeon builds NPU {hardware} and full-stack software program. Final November, the corporate launched a 7-nanometer AI chip, X330 NPU, for autonomous automobiles, and earlier this 12 months, it mentioned it will develop an on-device AI chip focusing on the sting computing market. Sapeon final raised greater than $45 million in a Collection A in August 2023, reaching a valuation of over $380 million.
This story has been up to date to incorporate feedback from Rebellions relating to the partnership with Samsung.
