South Korea's SK Telecom launches AI semiconductor company targeting US market
Summary
The company aims to sell to data centers and Big Tech players, initially in the U.S., said SAPEON CEO Soo-jung Ryu in an interview. Driving this growth is the rise in the adoption of over-the-top media streaming services and demand from users for personalized content, as well as increased adoption in the telecom, data centers and automotive industries.In terms of competition, NVIDIA Corp., Google LLC and Intel Corp. are all eyeing the AI market; Intel and Nvidia both launched new chips for AI and data centers this spring. "SAPEON will face a certain level of competition as a new entrant," said Shelley Jang, director and secondary rating analyst at Fitch Ratings.SAPEON faces a more uphill battle in the U.S. versus SK Telecoms home markets, where its connections could offer more advantages, said John Abbott, infrastructure analyst at 451 Research. "In Korea and Asia, it can benefit from its close associations with SK Telecom, given its strong presence in key [areas] such as smart factory, real-time voice translation, healthcare and enhanced reality gaming where AI is a requirement," Abbott said.SAPEON could eventually access SK Telecom affiliate SK hynixs sales network to gain a foothold in the U.S. market, said Sanghyun Park, an analyst at research portal Smartkarma. "They [smaller customers] go to the back of the queue when capacity at a fab is portioned out," Abbott said.When asked about the global chip shortages impact on the company, SAPEONs Ryu said that although they are not experiencing problems in terms of supplying chips to customers, the company is "closely monitoring the situation" while also "working with a wide array of partners to provide our next AI chip to the market."