As per a report from Reuters, South Korea’s SK Telecom-backed AI chip startup Sapeon Korea and KT-invested startup Rebellions have officially announced their merger.

The combined entity is expected to be established by the end of 2024, with the merger projected to create a business valued at over KRW 1 trillion (roughly USD 750 million), hinting at a potential challenge to NVIDIA’s leading position in the AI chip market.

As competition in the AI chip market intensifies, Sapeon and Rebellions have formalized their merger. The merger, which was rumored in June according to the Korean Economic Daily, have now been officially agreed upon, with Rebellions’ co-founder and CEO Sunghyun Park set to lead the executive team of the merged entity.

Sapeon and Rebellions are two South Korean chip startups. Rebellions introduced the ATOM chip last year, Korea’s first NPU designed for large language model (LLM) data centers. Meanwhile, Sapeon launched its next-generation AI chip, the X330, in November, enhancing Korea’s competitiveness in the global AI semiconductor market.

The two companies previously noted that they view the next two to three years as a critical opportunity for South Korea to establish a presence in the global AI semiconductor market. Moreover, they also emphasized their commitment to accelerating the formation of the merged entity to capitalize on this pivotal period.

The report by TheElec, citing industry sources, noted that since SK Group will be the majority shareholder of the merged entity, it may prefer TSMC over Samsung Foundry, given that SK hynix and Samsung are rivals in memory chips. Currently, Sapeon uses TSMC as its foundry, whereas Rebellions collaborates with Samsung Foundry.

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(Photo credit: Rebellions)