South Korea-based AI chipmakers Sapeon Korea, backed by SK Telecom (SKT), and start-up Rebellions agreed to merge their operations to position the combined entity to better compete in the global AI semiconductor industry.

The pair plan to finalise a contract this quarter after conducting due diligence and gaining shareholder approval.

Sapeon shareholders SKT, SK Square and SK Hynix will sell 3 per cent of their shares prior to the merger, making Rebellions the majority shareholder, with its management team to remain in place.

Following the merger, SKT will be a strategic investor in the company to be called Rebellions.

SKT CEO Ryu Young-sang (pictured, left) noted in a joint statement the deal will “greatly enhance our global position in AI semiconductors”, one of the key parts of the related value chain it is developing.

Rebellions co-founder and CEO Park Sung-hyun (pictured, right) added the chipmakers are taking a crucial step to extend Korea’s leadership in memory silicon into the “realms of logic chips and AI through this landmark consolidation”.

Sapeon was spun off from SKT’s internal R&D unit in 2016.

Rebellions was founded in 2020, launched two AI chips in three years and raised more than $225 million in funding worldwide.

Last month, it closed a $15 million Series B extension funding round by Wa’ed Ventures, a $500 million venture capital fund owned by Saudi Aramco.