South Korean AI chip start-ups South Korea's attack on the AI chip leader Nvidia

Related Vendors

FAULHABER Drive Systems

Taiwan Machine Tool & Accessory Builders' Association (TMBA)

SIMTOS (Seoul International Machine Tool Show)

When discussing AI hardware manufacturers, one name always comes up: Nvidia, as the company is now leading in the production of GPUs for AI calculations. However, South Korea wants to free itself from the AI market leader, with state subsidies and Samsung.

The company most often associated with AI chip production currently is Nvidia. The corporation is known for its GPUs (Graphics Processing Units), which are used not only for graphic applications, but also for AI calculations and machine learning, and just recently, CEO Jensen Huang, as part of the Blackwell announcement, spoke of no less than "driving a new industrial revolution".

When it comes to the production of AI hardware, Nvidia is therefore on everyone's lips, but there is an increasing effort in South Korea to free itself from dependency on the AI superpower and to lift previously unexplored possibilities in the global market for AI computing.

Although South Korea is home to two of the world's largest memory chip manufacturers, Samsung and SK hynix, the country lags behind the US in the field of AI chips. Some fabless manufacturers want to challenge the American market presence of Nvidia and Qualcomm with the help of Samsung and state subsidies.

Rebellions: Generative AI with Samsung's HBM3E

The start-up Rebellions has teamed up with Samsung's contract manufacturing division to develop a next-generation AI chip. This generative AI chip, using Samsung's high-end memory chip HBM3E, is set to debut in the second half of 2024. "We expect this will be a new alternative for global companies running large AI data centers," said Rebellions CEO Sunghyun Park to Nikkei Asia.

For this project, Rebellions recently secured almost 170 billion won (nearly 120 million euros) from venture capital firms in a Series B financing round.

Sapeon: Deliveries starting in June with TSMC support

The SK Telecom spin-off, Sapeon, plans to start shipping its AI chips to customers from June 2024; the product was already introduced at the end of 2023. "The chips are made by the Taiwan Semiconductor Manufacturing Co. with its 7-nanometer manufacturing technology, one of its most advanced processes," according to Nikkei Asia.

"Sapeon is at the forefront of AI semiconductor development and plays a leading role in advancing related markets," CEO Soojung Ryu said in a statement following the signing of an agreement with a subsidiary of Japanese telecommunications giant NTT Docomo.

Naver prefers Samsung

Naver offers the largest South Korean search engine and associated services, some of which use artificial intelligence. At the end of March 2024, it became known that the company's management decided to invest more than $750 million in the acquisition of AI chips from Samsung, instead of Nvidia hardware. Additionally, Naver had already decided in October 2023 to move away from using Nvidia GPUs and instead use Intel CPUs.

The Mach-1 AI chips from Samsung are said to be used for the Naver Place AI mapping service. The Samsung chips were not supposed to launch until 2025, but it is believed that Naver will receive a large quantity in advance (via Tom's Hardware).

The Mach-1 chips are in direct competition with Nvidia's H100 chips, provided they offer a similar performance. However, the Samsung product is said to cost only a tenth and also offers increased energy efficiency. It's no big secret that AI applications consume large amounts of energy and thus incur high costs, which is why more economical AI chips offer another advantage. Whether Samsung's product will deliver on the promises of performance at lower costs remains to be seen.

South Korea: Government Support

Also, the South Korean government is providing 300 billion won (just over 200 million euros) through the Semiconductor Ecosystem Fund to make investments in local companies in the fabless, materials, parts, and equipment sectors. Similarly, fabless companies in the semiconductor production sector can secure low-interest loans. With the AI chip market offering great growth opportunities, especially since the popular chat GPT application from OpenAI became widely available, it will be interesting to see in the coming years whether and who can attack Nvidia's quasi-monopoly in this regard. (sb)

AI chip

Nvidia Blackwell: Next-generation AI revolution