South Korea’s fabless AI chip industry is rapidly evolving, with significant fundraising activities over the past few years driving growth. Now, two leading startups, Rebellions and Sapeon, have announced a strategic merger to consolidate their operations and compete globally against giants like Nvidia. This merger positions them to lead South Korea’s AI chip market, aiming to leverage the “golden hour” of market opportunity over the next two to three years. The companies plan to focus on strengthening their neural processing units (NPUs) business, crucial to meet the surging demand in AI applications. The merged entity is expected to go public within the next 2-3 years.
Currently, Nvidia dominates the AI chip market, but challenges like increasing compute costs and declining chip availability present opportunities for new players. Companies like Apple, Google, and Amazon are already developing their own AI hardware, while industry collaboration is also on the rise to create standards for AI accelerator chips. The merger between Rebellions and Sapeon is a timely move to capitalize on these market dynamics.
The merger will involve comprehensive due diligence over the next month, aiming to finalize in the second half of 2024. Post-merger, the combined entity will include all employees from both companies, with Rebellions’ team leading management. Stakeholders like SK Telecom, KT, and SK Hynix will continue their involvement. Furthermore, Rebellions will maintain its partnership with Samsung Electronics for various ongoing projects, including the development of their AI chips using Samsung’s advanced fabrication processes.
Rebellions recently raised $124 million in a Series B round, while Sapeon, founded in 2016 and spun out from SK Telecom in 2022, raised over $45 million in a Series A last year. The merger is set to strengthen their competitive edge, combining resources and technological advancements to further innovate in the AI chip industry.
