Rebellions Inc., a South Korean artificial intelligence (AI) chip startup and SAPEON Korea, an artificial intelligence (AI) semiconductor company established by SK Telecom, have announced that they have signed a definitive merger agreement.

Rebellions said in a statement on Sunday that Rebellions and SAPEON Korea have agreed upon a merger based on an equity value ratio of 2.4:1 between the two companies, reflecting their corporate values and assets.

Post-merger, SAPEON Korea will be the surviving entity, with Rebellions’ current leadership managing the merged entity.

The merged entity is expected to be launched within this year.

The new company will retain the name ‘Rebellions’ and will be headed by Rebellions’ Chief Executive Officer Park Sung-hyun.

To secure Rebellions’ new management as the merged entity’s majority shareholders and ensure stability, SAPEON’s current shareholders — SK Telecom, SK Square and SK Hynix — will sell 3 percent of their SAPEON shares prior to the merger.

Following the merger, SKT will be a strategic investor, actively supporting the newly formed company’s expansion into the global AI semiconductor market and enhancing South Korea’s leadership in AI chip technology.

SK Hynix and SK Square, as shareholders of SAPEON, will also lend their support to the merged entity

It is noted that on June 12, both companies announced plans to merge, aiming to boost global AI infrastructure competitiveness.

Rebellions is an AI chip startup founded in 2020. The company has successfully launched two AI chips within three years and has raised over $225 million in funding from investors worldwide.

The firm began mass production of its AI chip ATOM this year and plans to launch its next generation AI chip ‘REBEL’ by the end of this year.

SAPEON Korea, an AI semiconductor company spun off from SK Telecom’s internal research and development (R&D) organization in 2016, is involved in high-performance AI semiconductor development.

The company introduced South Korea’s first AI semiconductor for data centers in 2020 and launched the next-generation AI semiconductor ‘X330’ in November last year.

With their combined development capabilities and expertise in the neural processing unit(NPU) market, the newly merged entity will be well-positioned to compete in the global AI semiconductor industry, said the statement.

“South Korea has long been a powerhouse in memory semiconductors. Today, we’re taking a crucial step to extend that leadership into the realms of logic chips and AI through this landmark consolidation,

“Our goal now is to emerge as a leading force in the worldwide AI chip market, navigating the intense industry competition,” said Park Sung-hyun, Co-founder and Chief Executive Officer of Rebellions.

Meanwhile, Ryu Young-sang, Chief Executive Officer of SKT, said that signing this agreement will greatly enhance their global position in AI semiconductors, one of the key parts of the AI value chain they are developing.

“We will continue to invest strategically and work together to become a leader in the AI era,” he added.

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