Samsung Has Invested in Two Chip Companies

Recently, Samsung Electronics made a strategic investment in Teramount Ltd., an Israeli startup, to secure high-speed data transmission technologies crucial for next-generation semiconductor packaging.

The move is seen as part of Samsung's broader push for optical interconnect technology, a key enabler in the era of artificial intelligence.

According to industry insiders on Wednesday, Samsung Catalyst Fund, Samsung's venture capital arm, participated in Teram's $50 million Series A financing. Other investors in the round include AMD Ventures, Hitachi Ventures and Wistron.

While the exact amount of Samsung's investment has not been disclosed, it is estimated that it will be held in the form of a strategic minority stake, ranging from millions of dollars to around $10 million.

Teramount is known for developing technology that enables direct integration of fiber optics with semiconductor chips, which allows for ultra-fast data exchange using light-based signals.

Its flagship technology – photonic plugs or universal photonic couplers – offers greater precision and scalability than traditional methods, allowing for dense and precise fiber-to-chip connections.

The solution supports ultra-high bandwidth and improves energy efficiency compared to traditional electrical signals, which is crucial for large-scale computing environments such as data centers, AI workloads, high-performance computing (HPC), and next-generation communications (5G/6G).

The company's proprietary self-aligning optics and photonic bump technology enhance connection reliability, while the detachable design simplifies manufacturing and maintenance.

Investing in AI chip startup Rebellions

South Korean AI chip startup Rebellions has recently secured funding from tech giant Samsung and plans to raise up to $200 million in funding before going public, company management told CNBC on Tuesday.

Last year, Rebellions merged with another South Korean startup called Sapeon to form a company that is positioned as one of the most promising competitors to Nvidia in South Korea.

Sungkyue Shin, chief financial officer of Rebellions, told CNBC on Tuesday that the company is currently raising funds with a target of between $150 million and $200 million.

Shin Dong-cheol said Samsung's investment in Rebellions last week was part of it, but he declined to say how much the tech giant put into it.

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Shin added that Rebellions has raised $220 million since its inception in 2020.

The round is still ongoing, and Shin said Rebellions is in talks with existing investors as well as Korean and global investors to participate in the financing. Rebellions has some large investors, including South Korean chip giant SK Hynix, telecommunications company SK Telecom, and South Korean telecom and Saudi Arabian oil giant Aramco.

Rebellions is most recently valued at $1 billion. Shin said the round would value it at more than $1 billion, but he declined to disclose specific figures.

Rebellions plans to conduct an initial public offering following the closing of this funding round.

"Our overall plan is to be public," Shin said.

Rebellions designed chips focused on AI inference rather than training. Inference is when a pre-trained AI model interprets real-time data and arrives at a result, similar to the answers given by popular chatbots.

With the support of major Korean companies and investors, Rebellions wants to compete in the global market and challenge Nvidia and AMD and a large number of other startups in the inference space.

Rebellions has been working with Samsung to bring its second-generation chip, Rebel, to market. Samsung owns a chip manufacturing company, also known as a foundry. The four Rebel chips come together to form the Rebel-Quad, which is the product that Rebellions will eventually sell. A spokesperson for Rebellions said the chip will be available later this year.

The funding will be used in part for product development at Rebellions. Rebellions is currently testing its chips, which will eventually be mass-produced by Samsung.

Rebellions CEO Sunghyun Park told CNBC on Tuesday: "The initial results are very encouraging. "

Park said part of Samsung's investment in Rebellions is due to the chip's good performance so far.

Samsung is using its 4nm process to manufacture semiconductors for Rebellions, which belongs to one of the cutting-edge chip manufacturing nodes. In contrast, Nvidia's current Blackwell chips use a 4nm process from Taiwan Semiconductor Manufacturing Co., Ltd.

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Rebellions will also use high-bandwidth memory (HBM) in its chips. This memory has a stacked structure and is capable of handling large data processing loads. Rebellions has not yet selected an HBM supplier.

This could be a strategic victory for Samsung, which currently lags far behind TSMC in terms of market share in the foundry space. Samsung has been looking to enhance its chip manufacturing division. Samsung Electronics recently signed a $16.5 billion semiconductor supply contract with Tesla.

If Rebellions succeeds in finding a large customer base, this will bring a major customer to Samsung's foundry business.