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Chips&Media Forms Joint Venture with Chinese AI Company for Local Data Center Push
Chips&Media Forms Joint Venture with Chinese AI Company for Local Data Center Push
Seoul, South Korea – Aug 27, 2024
Joining the Chinese Semiconductor Ecosystem to Preempt the Market through Product Enhancement
Chips&Media (094360) established a joint venture with a Chinese artificial intelligence (AI) semiconductor company to target the Chinese market.
The global video IP technology leader officially announced on the 27th that it would establish a joint venture (hereinafter referred to as JV) with a Chinese AI system-on-chip (SoC) company following a board decision made on August 26.
The key objectives of this JV include △reselling Chips&Media’s IPs in the Chinese market, △directly targeting the Chinese data center market by developing specialized IPs tailored for existing IP-based data centers, △enhancing sales competitiveness in China, and △maximizing JV IP licensing profit.
In recent years, China has been actively working to replace NVIDIA's graphics processing units (GPUs) in an effort to build an independent semiconductor ecosystem amid ongoing US-China semiconductor tensions. This has driven a surge in developing domestic GPUs and AI SoCs (NPUs), and despite the economic challenges, the number of fabless semiconductor companies in China has grown dramatically, from around 600 in 2010 to approximately 3,450 in 2023.
The JV is a highly competitive AI semiconductor company in China and a long-term customer of Chips&Media. Hence, their partnership is expected to generate advantages through close business collaboration.
Chips&Media has been actively pursuing global opportunities in the AI era, leveraging the growing demand for on-device AI technologies.
Kim Sang-hyun, CEO of Chips&Media, stated, "Recently, there has been a strong push to build an independent semiconductor ecosystem, and the demand for AI semiconductors from local governments and tech companies in China has been also steadily increasing, making the Chinese market highly promising. By establishing a JV with a Chinese AI semiconductor company, we will join the Chinese semiconductor ecosystem and preempt the market by targeting data centers in China, reselling our IPs, and further enhancing our products."