South Korean chip design company SEMIFIVE announced on Monday that it has signed a 70.3 billion won contract with a US-based AI semiconductor fabless company to develop an AI inference accelerator — the largest development contract in the company's history.
The deal is a significant milestone for SEMIFIVE, a Samsung-backed chip design specialist. The company said the contract value equals about 40 percent of its total orders of 168.4 billion won last year, and more than half of the 118.9 billion won in orders it secured during the first half of this year.
Payment in stages, production in 2028
The contract's payments will be recognised in stages: 11 percent upfront, followed by 22 percent, 22 percent, 30 percent and 15 percent across four development phases. SEMIFIVE is targeting tape-out — the point at which a chip design is handed over for manufacturing — in the first half of next year, after which the design will be handed over to Samsung Electronics' foundry division. Mass production is expected to begin in 2028, and the contract includes production, meaning it could generate recurring revenue for SEMIFIVE after manufacturing begins.
A first in six years
SEMIFIVE said this is its first "spec handoff" project in about six years since establishing its North American operations. Under this model, the customer provides only performance requirements and specifications, while the design house handles everything from design and packaging to testing, mass production and software development. The targeted customers for the chip are global hyperscalers and cloud service providers, with the possibility of additional revenue depending on the scale of mass production.
The customer has not been named. "We cannot disclose the specific customer name under a nondisclosure agreement (NDA), but it is a customer that has had no previous transaction history with the company," a SEMIFIVE official said.
What is known of the chip
Few technical details have been disclosed, but the company confirmed the chip will use LPDDR6 memory and fifth-generation (Gen5) PCIe interfaces. The announcement underscores how AI-chip demand is reshaping the semiconductor supply chain, with design houses landing increasingly large contracts as hyperscalers race to build custom AI infrastructure.
Sources: SEMIFIVE Lands 70.3 Billion Won AI Chip Contract From US Fabless Firm
The deal is a significant milestone for SEMIFIVE, a Samsung-backed chip design specialist. The company said the contract value equals about 40 percent of its total orders of 168.4 billion won last year, and more than half of the 118.9 billion won in orders it secured during the first half of this year.
Payment in stages, production in 2028
The contract's payments will be recognised in stages: 11 percent upfront, followed by 22 percent, 22 percent, 30 percent and 15 percent across four development phases. SEMIFIVE is targeting tape-out — the point at which a chip design is handed over for manufacturing — in the first half of next year, after which the design will be handed over to Samsung Electronics' foundry division. Mass production is expected to begin in 2028, and the contract includes production, meaning it could generate recurring revenue for SEMIFIVE after manufacturing begins.
A first in six years
SEMIFIVE said this is its first "spec handoff" project in about six years since establishing its North American operations. Under this model, the customer provides only performance requirements and specifications, while the design house handles everything from design and packaging to testing, mass production and software development. The targeted customers for the chip are global hyperscalers and cloud service providers, with the possibility of additional revenue depending on the scale of mass production.
The customer has not been named. "We cannot disclose the specific customer name under a nondisclosure agreement (NDA), but it is a customer that has had no previous transaction history with the company," a SEMIFIVE official said.
What is known of the chip
Few technical details have been disclosed, but the company confirmed the chip will use LPDDR6 memory and fifth-generation (Gen5) PCIe interfaces. The announcement underscores how AI-chip demand is reshaping the semiconductor supply chain, with design houses landing increasingly large contracts as hyperscalers race to build custom AI infrastructure.
Sources: SEMIFIVE Lands 70.3 Billion Won AI Chip Contract From US Fabless Firm
