Korean startup building chip to save traders microseconds

Seoul

IN THE unfathomably fast realm of high-frequency trading, a South Korean startup's plan to build a microchip that speeds markets up by a few microseconds is bound to get some attention.

The company, Rebellions Inc, was set up six months ago in Seoul by Park Sunghyun, who used to work as a quant developer at Morgan Stanley in New York, with two partners. The chip they are developing aims to run artificial intelligence more efficiently, which could cut precious millionths of a second off the reaction times of automatic-trading machines.

That's a bold claim in the absence of a completed prototype, but it could also be a big deal if it pans out. Such is the state of speed in financial markets after traders spent the past decade shaving milliseconds - or thousandths of a second - off their reaction times by constructing nearly light-speed wireless networks spanning continents and crossing oceans.

Since those networks are bumping up against the limits of physics - nothing in the universe, not even traders' wireless signals, can go faster than the speed of light - edges are being found elsewhere. That includes traders trying to coax their machines to process data faster, so orders can be placed quicker.

"An AI chip could halve the microseconds needed to make the orders," said Mr Park, 37, the chief executive officer of Rebellions and holder of a PhD from the Massachusetts Institute of Technology. "There are some companies that just continue to stick to the technology they are used to - we want to change that."

The technology Rebellions is developing is called an application-specific integrated circuit, or ASIC - a chip designed to do a single thing well, as opposed to general purpose microprocessors like the ones Intel Corp made famous. This focus could help the Rebellions product run traders' algorithms more efficiently than alternatives. That's the idea, anyway.

Rebellions is on an "unlimited" hiring spree, aiming to quadruple its 20-person workforce by 2023, Mr Park said. It has gotten 5.5 billion won (S$6.68 million) of investments from firms including Kakao Ventures, which is part of messaging giant Kakao Corp, and Shinhan Capital Ltd, a subsidiary of one of Korea's biggest financial holding companies.

Rebellions plans to have a prototype ready in the second half of the year. Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, has agreed to begin making the ASICs in 2022.

"Anything that reduces latencies and improves speed will be important and be adopted by the industry," said Richard Repetto, an analyst at Piper Sandler & Co in New York. However, with trading speeds already so fast, creating a faster chip "is just not the arms race it was before", he added.

Mr Park faces competition from other AI-focused ASICs. They include Google's Tensor Processing Unit, a chip that helps power products like Gmail and Google Translate, and Groq Inc, founded by former members of Google's TPU team. Intel acquired Habana Labs Ltd in 2019 to boost its AI-chip prowess.

Mr Park is thinking big. After high-frequency trading, he wants to next create chips that speed up cloud services and enable autonomous driving. "Deep learning is going to be a mega trend, and we want to be ready before it comes," he said. BLOOMBERG

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