Rebellions Inc and Sapeon Korea Inc, two leading South Korean artificial intelligence chip developers, have signed a definitive merger agreement. This move, first announced in June, aims to strengthen their position in the global AI chip market currently dominated by companies like NVIDIA.
The merger will create a company valued at approximately 1.4 trillion won ($1 billion), potentially becoming South Korea's first AI sector "unicorn." While Sapeon will be the surviving entity, the merged company will operate under the Rebellions name.
Rebellions CEO Park Sung-hyun will lead the new organization. To maintain Rebellions' management as the largest shareholders, Sapeon's current owners - SK Telecom, SK Hynix, and SK Square - have agreed to sell 3% of their post-merger stakes.
The companies agreed to an equity value ratio of 1:2.4 between Sapeon and Rebellions. They plan to launch the new entity before the end of 2024, citing the next two years as crucial for establishing a foothold in the competitive AI chip sector.
Rebellions, founded in 2020, has already launched two AI chips and began mass production of its ATOM chip earlier this year. The company plans to introduce its flagship Rebel chip by year-end.
SK Telecom CEO Ryu Young-sang expressed support for the merger, stating it would enhance their position in AI semiconductors, a key component of SK Telecom's AI strategy. The telecom giant will remain a strategic investor in the merged company.
This consolidation represents another step in South Korea's efforts to challenge global AI chip leaders. The worldwide AI chip market, valued at $34.3 billion in 2023, has been largely controlled by NVIDIA, which holds more than a 90% market share.