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Asian operators plunge into chip marketAsian operators plunge into chip market

Led by South Korea's SKT and KT, this is seen as a strategic move that will lift growth and innovation.

Robert Clark

January 13, 2022

3 Min Read
Asian operators plunge into chip market

Some of Asia's biggest telcos are beating a path into the chip business, spying opportunity in particular in AI and IoT.

They're not being driven by the semiconductor shortage; this is seen as a strategic move that will lift growth and innovation.

Leading the way are Korea's SKT and KT, which are both building their own AI chips. SKT also looks set to join a collaboration with Qualcomm in data center chips.

SK Telecom's flagship semiconductor project is its Sapeon AI chip, which it has been showcasing at CES 2022 this week.

It says its latest generation chip uses 20% less power and can support 1.5 times faster deep learning computation.

The first Sapeon product, released 14 months ago, has been deployed in SKT's AI assistant Nugu and to optimize media content and video resolution.

SKT last month spun off its AI chip division into a fully owned subsidiary, expected to be named Sapeon Korea, capitalized at 31 billion won (US$26 million).

Lee Jong-min, the head of SKT's Tech Innovation Group, told an interviewer last year the operator believes the convergence between mobile networks and AI "will become the most important driver" in the new automation and smart manufacturing revolution underway across the economy.

It is part of a broad drive by SKT into AI, which it believes when combined with 5G can accelerate growth. On taking the top job last November, new CEO Ryu Young-sang said he aimed to reinvent SKT as an "AI and digital infrastructure service company."

He said SKT would introduce customized AI agents across all of its products and services to provide "differentiated value by offering personalized services."

Rival KT has embarked on a collaboration with flash storage developer FADU, with the aim of launching the first AI chips in 2023 to underpin its AI-as-a-Service offering, KED Global reported.

Its aim is to offer subscription-based AI solutions optimized for different verticals such as self-driving vehicles and financial services.

China Mobile and NTT DoCoMo have also been involved in chip plays that are smaller but still quite strategic.

China Mobile last July set up a fully owned subsidiary, Xinsheng Technology, to carry out the design and manufacture of IoT chips, as well as other tech products like security and smart home gear.

This week it was revealed it had taken a strategic stake in Nanjing-based Innochips Tech, a 5G baseband manufacturer. The two companies would work together on IoT, chip product innovation and other areas, East Money reported.

NTT DoCoMo Ventures took a stake in Israeli IoT sensor startup Wiliot two years ago, along with Verizon, Qualcomm and others. Wiliot won a further $200 million funding round led by Softbank Vision Fund 2 last July.

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— Robert Clark, contributing editor, special to Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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