Samsung-backed South Korean AI Chip Startups Eye Nvidia-led Global Market

In a bid to seize a slice of the booming artificial intelligence (AI) market, South Korean startups are ramping up efforts to design cutting-edge AI chips.

With backing from tech giant Samsung Electronics and support from the government, these companies are making significant strides in the field of AI computing (via Nikkei Asia).

South Korean Startups Eye Global Chip Market

One such startup, Rebellions, established in 2020, is working hand-in-hand with Samsung's foundry division to develop a cutting-edge AI chip.

This chip, set to incorporate Samsung's high-end HBM3E memory, is expected to revolutionize AI computing, potentially making its market debut as early as the second half of this year.

Rebellions is not alone in this endeavor. Sapeon, a spinoff from South Korea's leading telecom company, SK Telecom, is also making waves. With plans to supply its AI chip manufactured by Taiwan Semiconductor Manufacturing Co., Sapeon aims to deliver its innovative solution to customers by June.

A Burgeoning AI Market

These initiatives are pivotal in the semiconductor industry, with global players racing to capitalize on the burgeoning AI market.

Nvidia, renowned for its graphic processing units (GPUs) tailored for AI computing, currently leads the pack. However, the emergence of South Korean startups poses a formidable challenge to Nvidia's supremacy.

Drawing on his extensive background in finance and aerospace technology, Park brings a wealth of experience to Rebellions. The company recently secured a substantial investment of almost 170 billion won ($128 million) in its Series B funding round, with contributions from prominent venture capital firms and telecommunications giant KT.

Meanwhile, Sapeon's collaboration with Docomo Innovations underscores its commitment to advancing AI services across various healthcare and insurance sectors. CEO Soojung Ryu, who distinguished himself at Samsung before leading Sapeon, emphasized the company's pioneering role in Korea's AI semiconductor development.

Government Support

The South Korean government recognizes the strategic importance of the semiconductor industry and has introduced initiatives to bolster local fabless companies.

A 300 billion won "semiconductor ecosystem fund" aims to stimulate investment in semiconductor-related ventures, while low-interest loans totaling 24 trillion won will support the growth of fabless companies.

Last year, Samsung also said it would spend $230 billion (300 trillion won) to build five new memory and foundry fabs in South Korea, supporting the government's goals of establishing a massive semiconductor center in Yongin, outside Seoul. These expenditures will continue until 2042.

Despite South Korea's status as home to major memory chipmakers like Samsung and SK Hynix, the nation trails behind the US in designing advanced chips. Analysts note the importance of closing this gap to secure a stronger foothold in the global semiconductor market.

Amidst these developments, concerns over semiconductor supply chain disruptions have intensified. Recent moves by Samsung and SK Hynix to halt the sale of used chipmaking equipment reflect heightened geopolitical tensions and regulatory pressures. The US, in particular, is urging stricter controls on semiconductor exports, citing national security concerns.

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