Merger of Leading Domestic AI Semiconductor Companies
Integration Within the Year... Strengthening AI Infrastructure Competitiveness
"A Magnanimous Decision by SKT and KT," Experts Say
SK Telecom's subsidiary 'Sapeon' and KT-backed startup 'Rebellion,' which received an investment of 66 billion KRW, are merging. Both companies are AI semiconductor-related firms, and through this merger, they aim to strengthen their AI infrastructure competitiveness.
On the 12th, SKT announced that it is promoting a merger between its semiconductor affiliate Sapeon and AI semiconductor fabless (design) company Rebellion.
SKT stated, "This merger initiative is the result of both companies agreeing to create a national representative company to compete in the global AI infrastructure war through a grand integration of domestic AI semiconductor companies," adding, "There will be no stock sales by existing shareholders in this merger."
The NPU (Neural Processing Unit) market for AI technology operation is currently experiencing rapid growth, leading to fierce competition among global companies for market dominance. SKT and Rebellion view the next 2-3 years as the 'golden time' for South Korea to gain a foothold in the global AI semiconductor market and have determined that a swift merger is necessary.
After completing necessary procedures such as due diligence and shareholder approval, they plan to finalize the main contract for the merger by the third quarter of this year and launch the integrated corporation within the year. Depending on the due diligence results, decisions will be made on which technologies and strategies will drive future management. The organizational structure and corporate name are yet to be decided.
Given the nature of the system semiconductor industry, where startups can respond more agilely to market conditions than large corporations, Rebellion is expected to take charge of managing the merged entity.
Sapeon is an AI semiconductor specialist company that spun off in 2016 from SKT's internal research and development organization. After introducing the first domestic data center AI semiconductor in 2020, it unveiled the next-generation AI semiconductor 'X330' in November last year. Through developing high-performance AI semiconductors, it has expanded its business scope to autonomous driving and edge services. Sapeon CEO Ryu Su-jeong, formerly of Samsung Electronics, joined SKT as the AI Accelerator lead in 2021 and was appointed CEO of Sapeon in January 2022.
Rebellion is an AI semiconductor fabless startup co-founded in 2020 by CEO Park Sung-hyun and CTO Oh Jin-wook. Over three years since its founding, it has released two products and rapidly grown to a corporate valuation of 880 billion KRW. The KT Group invested a total of 66 billion KRW in Rebellion through KT, KT Cloud, and KT Investment. As a key partner of KT AI hardware, Rebellion gained attention by developing the 'ATOM' NPU, which features fast computation speed and high power efficiency. Last year, it succeeded in commercializing the first domestic NPU for data centers and has attracted attention as it began mass production this year. It is currently developing the next-generation AI semiconductor 'REBEL' targeting the large language model market.
However, both companies have struggled in the market, overshadowed by global big tech firms. Rebellion recorded sales of 2.734 billion KRW and an operating loss of 1.587 billion KRW last year. Sapeon's sales last year were 5.583 billion KRW, with an operating loss of 25.924 billion KRW.
After the merger, SKT will remain the largest shareholder of Sapeon. SKT plans to actively support the merged company's entry into the global AI semiconductor market and the enhancement of domestic AI semiconductor competitiveness as a strategic investor. SK Square and SK Hynix, shareholders of Sapeon, will also support the merged entity. KT, a strategic investor in Rebellion, has also united in this merger effort to secure technological sovereignty and create a world-class company.
An SKT official said, "Both companies expect that by combining the development capabilities and know-how that Sapeon Korea and Rebellion have proven in the NPU market, the new merged company will secure competitiveness in the global AI semiconductor market." An AI industry insider commented, "This merger marks the start of alliances and consolidations anticipating the expansion of the AI semiconductor market," adding, "It is also a grand decision by South Korea's top two mobile carriers, SKT and KT."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
