Xiaomi Plans Next-Gen Smartphone Chip

Xiaomi, the Chinese tech behemoth, is doubling down on its semiconductor ambitions with plans for a new high-end smartphone chip, according to a top executive. However, unlike Apple’s annual cadence, Xiaomi won’t be committing to a yearly release schedule.

Xu Fei, Xiaomi’s Vice President, shed light on the company’s strategic roadmap, highlighting the long-term commitment required for in-house chip development.

This push for proprietary silicon echoes similar strategies from industry giants like Apple, Samsung, and Huawei. Xiaomi’s rationale is clear: to gain greater control over its hardware and software integration, ultimately boosting its competitiveness in the lucrative high-end smartphone market.

Last year saw the debut of Xiaomi’s XRing 01 system-on-chip (SoC), fabricated using a cutting-edge 3-nanometer process. This signifies Xiaomi’s intent to compete at the forefront of semiconductor technology. An SoC integrates crucial components responsible for a device’s functionality.

Xiaomi previously pledged an investment of at least 50 billion yuan ($7 billion) over the next decade to fuel its chip development efforts, a testament to its long-term vision.

While “planning ahead” for the next generation of chips, Xu emphasized the need for a measured approach, refraining from promising an annual SoC release.

“We are a newcomer here, we need to learn and we need to plan,” Xu stated, acknowledging the complexities of the semiconductor industry.

In contrast, Apple has consistently launched new A-series chips annually since 2010, with the A19 being the latest iteration powering the iPhone 17 series. This consistent release cycle allows Apple to fine-tune its hardware and software integration, a key differentiator in the market.

Xu further clarified Xiaomi’s perspective on return on investment, revealing that while the initial XRing 01 production run is slated for 1 million units, achieving profitability necessitates producing at least 10 million units per chip release.

“So for us, we know we probably need to have ten years patience for the SoC to finally break even,” Xu explained. “So at the first time, we just need to make sure the experience is good enough, the performance is good enough.”

The SoC is the central processing unit of a smartphone. The significant benefits Apple has experienced designing its own chips stems mostly from higher control over system software and hardware integration.

The advantage lies in the ability to tailor hardware to efficiently run its own software such as iOS, allowing it to optimize performance and user experience. Industry analysts believe this level of vertical integration gives Apple a distinct competitive edge.

Xiaomi, with its Android-based HyperOS and HyperAI suite, could similarly benefit from a custom-designed chip that optimizes performance and integration of its own software ecosystem.

“It brings in vertical expertise to provide a tightly integrated experience with HyperOS and HyperAI to its ecosystem similar to Apple or Google,” Neil Shah, Partner at Counterpoint Research, noted, pointing to the potential for enhanced synergy between hardware and software.

Looking beyond smartphones, developing an SoC provides Xiaomi with invaluable expertise applicable to its diverse product portfolio, ranging from smartwatches and appliances to electric vehicles, highlighting the potential for cross-platform synergy and innovation, Shah added. The development of expertise can allow greater efficiency for products across various platforms.

Presently, Xiaomi devices rely on chips produced by Qualcomm (U.S.) and MediaTek (Taiwan). The Xiaomi 17 is currently powered by Qualcomm’s latest generation of SoC.

Despite its own chip development efforts, Xiaomi intends to maintain relationships with existing suppliers.

“For Qualcomm, MediaTek, they are super, extremely good partners. We’ve been working them for 15 years, so we will continue this path. And at the same time, we’ll select … [the] right product to try our own chipset. We are going with two solutions at the same time,” Xu affirmed, emphasizing the ongoing strategic importance of these partnerships.

“So we made it very clear to our partners: don’t be too worried at all,” Xu concluded, reassuring Qualcomm and MediaTek of Xiaomi’s continued commitment to their solutions.