The Korean artificial intelligence (AI) semiconductor sector is poised for a significant shift as two homegrown firms, Rebellions and FuriosaAI, prepare to make major moves that could disrupt the established market leaders, including Nvidia, as reported by The Korea Times.

Rebellions, a fabless AI semiconductor company, recently announced its merger with Sapeon Korea, a move that signals a robust entry into the competitive AI chip market. The merger, which values the combined entity at approximately KRW1.14 trillion (about $851.2mn), follows a swift agreement just two months after its proposal. The merger agreement stipulates an exchange ratio of 2.4 Rebellions shares for every Sapeon Korea share.

The merged company is anticipated to attract significant attention from global investors and major Korean telecom firms, including SK Telecom and KT.

Rebellions, which is also advancing towards an initial public offering (IPO), has engaged Samsung Securities as its lead manager. Valuations post-IPO are projected between KRW2 and 4 trillion, reflecting strong market confidence. Founded in 2020, Rebellions is led by CEO Park Sung-hyun and CTO Oh Jin-wook, both of whom bring substantial experience from Intel, Samsung, SpaceX, and IBM.

Rebellions’ strategic focus on neural processing units (NPUs) sets it apart from the more common graphics processing units (GPUs). NPUs are designed to handle AI tasks more efficiently, particularly for deep learning and neural network applications. The company’s flagship products include the ATOM, which is now in mass production, and the forthcoming REBEL model.

In parallel, FuriosaAI, another notable player in the Korean AI accelerator chip market, is drawing investor interest with its impending IPO. Mirae Asset Securities has been selected as its lead manager, and FuriosaAI is targeting an KRW80bn raise. The company’s valuation could reach KRW760bn if successful. Established in 2017 by CEO June Paik, FuriosaAI is making waves with its WARBOY data centre accelerator, which has already been chosen by ASUS for inclusion in their servers.

FuriosaAI plans to unveil its next-generation chip, Renegade (RNGD), at the AI Hardware & Edge Summit in San Jose next month. The RNGD will leverage HBM chips from SK hynix and is expected to offer competitive advantages in price and power efficiency compared to Nvidia’s offerings.

Both Rebellions and FuriosaAI are set to play significant roles in reshaping the AI semiconductor landscape, potentially challenging Nvidia's market dominance and attracting increased investment and attention from global players.