South Korean artificial intelligence (AI) semiconductor companies Rebellions and Sapeon Korea have finalised a deal to merge to create the country’s leading AI chip company.  

The financial terms of the transaction were not disclosed.  

Sapeon Korea was spun-off from SK Telecom‘s internal research and development division in 2016. 

It introduced the country’s first AI chip for data centres in 2020 and has since expanded into autonomous driving and edge services.  

The company’s latest offering, the ‘X330’ AI semiconductor, was unveiled in November 2023. 

Rebellions, a fabless AI semiconductor startup founded in 2020 by CEO Park Sung-hyun and CTO Oh Jin-wook, has made headlines with its ‘ATOM’ semiconductor.  

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This product, which began mass production this year, is designed to accelerate large language models (LLMs) in data centres.  

Rebellions is also developing ‘REBEL’, a next-generation AI chip targeting the LLM market. 

The merger comes at a time when the neural processing unit (NPU) market is expanding rapidly, with intense global competition to lead the AI industry.  

SK Telecom has described the next two to three years as a ‘golden time’ for Korea to secure a dominant position in the global AI semiconductor market, highlighting the urgency of the merger. 

The combined expertise and technological know-how of Rebellions and Sapeon Korea are expected to enhance competitiveness in the NPU market.  

The agility of startups such as Rebellions is seen as an advantage in the fast-evolving system semiconductor industry, allowing for quicker market responses than larger corporations. 

Rebellions will manage the operations of the merged entity.  

Rebellions and Sapeon Korea’s investors, including SK Telecom, SK Square, SK Hynix, and datacentre corporation KT, have offered their support for the merger.  

The merger is anticipated to conclude in the third quarter, following due diligence and shareholder approval, with the integrated corporation launching within the year. 

This development follows Rebellions’ $124m (Won1.7trn) Series B funding round in January 2024. 

KT, South Korea’s largest datacentre company, led the fundraising round, which also included participation from KT’s subsidiary kt cloud and Shinhan Venture Investment.