Xiaomi is trying hard to catch up with its competitors’ advancements in semiconductor technology, including Apple, Samsung Electronics, and Huawei Technologies.
Smartphone giant Xiaomi is one of China’s top three investors in semiconductor development. Chief executive Lei Jun said the company will invest 50 billion yuan ($6.9 billion) over the next 10 years to develop its chips.
It is the latest step by the Chinese company to increase its reliance on domestic technology amid the ongoing trade war between the United States and China, since Washington denies companies in the second-largest economy in the world access to some semiconductors.
A Xiaomi spokesperson confirmed that they will start the 50-million-yuan investment from 2025. Lei wrote on the Chinese microblogging platform Weibo that the company had reached the milestone in April after investing 13.5 billion yuan and assigned 2500 research-and-development (R&D) personnel to work on its XRing O1 system-on-a-chip (SoC).
A system on a chip or SoC is a type of semiconductor made up of various parts that work together to run a device, such as a smartphone. It could involve components like wireless networking and memory.
The new integrated circuit (IC) will become China’s most potent smartphone SoC and its first 3-nanometer chip, one of the most state-of-the-art in the market.
Lei commented that the chips represent the crucial tech race to advance through hardcore technology.
Till now, Qualcomm, a United States company, has been the primary supplier of system-on-chips for Xiaomi’s smartphones through its Snapdragon-branded semiconductors.
He wrote that the company built XRing O1 using the 3-nm lithography method used in semiconductor manufacturing, but did not specify which chip manufacturer he hired to construct the new IC.
The company will host an event to introduce its XRing O1, new tablets, smartphones, and a sneak peek of its first electric sports utility vehicle, YU7.
The company did not immediately answer a request for comment.
After the announcement, Xiaomi’s Hong Kong-listed shares ended the day 2.65% higher at HK$52.35 (US$6.70).
Xiaomi is trying hard to catch up with its smartphone competitors’ advancements in semiconductor technology, including Apple, Samsung Electronics, and Huawei Technologies.
Research firm IDC reports that Xiaomi shipped 41.8 million smartphones in the first quarter, making it the world’s third-largest smartphone vendor (just behind in the race with Samsung and Apple) with a 13.7% worldwide market share.
In terms of research and development (R&D) expenditures, Xiaomi is not likely to surpass Semiconductor Manufacturing International Corp (SMIC), the leading contract chipmaker in mainland China.
According to the company’s financial documents, Shanghai-based SMIC spent US$765.3 million on semiconductor development in 2024.
Huawei, which has been on the United States trade blacklist since May 2019 have also raised its spending on advanced IC development. On the other hand, the Shenzhen-based company did not disclose the 179.7 billion yuan it spent on R&D last year.
Lei talked about the challenges faced by the company when creating its mobile SoC, the Surge S1. He stated that Surge S1’s poor baseband features caused it to fail in the market when it was first released in 2017. Baseband is used in telecommunications to efficiently carry data over networks by encoding digital and electrical signals.
Lei stated they are pushing hard into IC development because their die-hard wish is to become a great hardcore technology company.
According to him, semiconductors are like a mountain to climb and a battle to win to achieve the company’s dream.
Lei, one of the most well-known leaders in China’s electronics sector, has a dress code that reflects their dedication to specific products, such as semiconductors, smartphones, and electric cars (EVs).
Just like Apple founder Steve Jobs wore a black shirt, blue pants, and sneakers during the iPhone launch, he wore the same while promoting Xiaomi’s smartphones.