Two AI semiconductor startups, Rebellion and Sapeon Korea, have announced their decision to merge, aiming to create a national representative company to compete in the global AI infrastructure war. The announcement was made on June 12, with the merger agreement expected to be finalized by the third quarter of this year and the launch of the merged entity targeted within this year.

Rebellion, founded in 2020, has released two products in three years and has received a total investment of 66.5 billion KRW from KT Group. Sapeon Korea, which started as SK Telecom’s (SKT) AI semiconductor division in 2016, was established as a separate entity in January 2022 with an investment of 40 billion KRW from SKT. SKT holds a 62.5% stake in Sapeon.

The merger aims to enhance South Korea’s competitiveness in the global AI semiconductor market. “Through the grand integration of domestic AI semiconductor companies, we aim to create a national representative company to compete in the global AI infrastructure war,” stated representatives from Rebellion and SKT. They further emphasized the urgency of the merger, viewing the next 2-3 years as a ‘golden time’ for South Korea to gain a foothold in the global AI semiconductor market.

The merger will combine the strengths of both companies. Rebellion’s second product, the AI semiconductor ‘ATOM,’ was the first domestic NPU to be commercialized in data centers last year, demonstrating its acceleration performance for large language models (LLM). Sapeon Korea unveiled its next-generation AI semiconductor ‘X330’ in November last year.

The merger process will involve due diligence and shareholder approval, with the aim to complete these procedures by the third quarter of this year. The merged entity is expected to launch by the end of the year, positioning itself as a formidable player in the global AI semiconductor market.

Industry experts have weighed in on the merger. An industry insider noted, “The business structure is such that Sapeon Korea will continue its operations, so there should be no significant issues in creating synergy.” A securities industry expert added, “KT Group is both a collaborator and a major investor in Rebellion.”

SKT plans to actively support the merged entity as a strategic investor, aiming to enhance South Korea’s AI semiconductor competitiveness and expand into the global AI semiconductor market. “Given the rapidly changing nature of the system semiconductor industry, startups can respond more agilely to market conditions than large corporations,” commented an SKT representative.

KT also expressed its commitment to the merger, stating, “We have united our efforts to secure technological sovereignty and to birth a world-class AI semiconductor company.”

The merger reflects broader national economic goals of technological sovereignty and leadership in advanced technologies. By combining their expertise and resources, Rebellion and Sapeon Korea aim to bolster South Korea’s position in the global AI semiconductor market, ensuring their survival and competitiveness in a rapidly evolving industry.