Ex-Consultant Asks Temasek to Help Build Chip Design’s TSMC

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(Bloomberg) — A startup aims to become the go-to provider of enterprise chip design solutions as more tech companies like Apple Inc. begin developing their own custom processors for PCs and servers to challenge the industry stalwart Intel Corp.

SemiFive Inc., based in Bundang, South Korea, offers system-on-chip design solutions that can help companies cut development costs and time in half, a strategy similar to the foundry model that Taiwan Semiconductor Manufacturing Co. launched for the production of chips.

To realize its ambitions, SemiFive has raised 130 billion won ($109 million) at a valuation of $326 million, said Brandon Cho, who founded the startup in 2018 with backing from SiFive Inc. The latest round has attracted Pavilion Capital from Temasek Holdings Pte and several local assets. management companies as new investors, joining previous backers SoftBank Ventures Asia and LB Investment.

Following the round, SiFive holds a stake of approximately 20% in the startup. Cho, who spent five years leading semiconductor-related projects at the Boston Consulting Group in Seoul after earning a doctorate in computer engineering from the Massachusetts Institute of Technology, and a group of fellow founders have more than 10%.

“If chip customers provide 30% of the ideas for custom chip designs, we as a platform provider can provide 70-80% of the modules, like what Android provides to software developers” , said Cho. “Big tech companies like Tesla, Apple and Meta are building their own chip capabilities and there is an urgent need for the current fabless value chain to be unsustainable. I think the chip design houses will collapse and the fundamentals of the fabless industry will change.

SemiFive has integrated chip architectures for edge servers, high-performance computing (HPC) and Internet of Things (IoT) products and aims to expand its portfolio to automobiles and microcontrollers. He is currently working on eight projects from Korean companies, including artificial intelligence chip startup FuriosaAI and Rebellions. The chips under SemiFive’s projects will be produced by the foundry of Samsung Electronics Co.

Its competitors include China’s Verisilicon Microelectronics (Shanghai) Co., which provides one-stop custom silicon services and chip IP licensing, and Global Unichip Corp. of Taiwan, a full-service SoC design foundry. SOCs, the building block of modern smartphones, consolidate processing, graphics, and memory into a single module, unlike the discrete components found in desktops and most laptops.

Total orders last year reached 30 billion won, generating revenue of 10 billion won, Cho said. The company aims to double its orders and increase its sales fivefold this year, he said.

The Korean chip startup, which runs global operations in India and Vietnam, aims to attract customers in the United States and China this year, although the pandemic is making it harder to break into new markets, Cho said.

“We will pursue another funding round at the end of this year if we need another acquisition,” Cho said. “Otherwise we would skip another funding round and go for a pre-IPO in 2023. Our goal is to list the shares as early as 2024, hopefully in the US”

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