Xiaomi is making a bold re-entry into the semiconductor arena with a massive financial commitment to develop its own AI chips, positioning itself as a serious contender in the global tech ecosystem.
The Beijing-based smartphone and EV maker announced it will invest at least 50 billion yuan ($6.9 billion) in chip design over the next decade, with the investment timeline starting from 2025, as confirmed by a company spokesperson. Xiaomi's founder and CEO Lei Jun emphasized the strategic importance of this initiative, stating that "chips are a peak we need to climb and a hard battle we cannot escape if we want to become a great hard tech company."
At the center of this strategy is the upcoming Xring O1, a system-on-chip (SoC) built on advanced 3-nanometer fabrication technology—placing it among the most sophisticated processors currently available. The chip will be officially unveiled at a major product launch event on May 22, alongside a new smartphone, tablet, and the company's highly-anticipated YU7 electric SUV.
Xiaomi's semiconductor journey began in 2014, culminating in the release of its first mobile processor—the Surge S1—in 2017. However, the company later shifted focus to less complex chips due to various setbacks. In 2021, Xiaomi revived its ambitions for mobile processors, and has since invested more than 13.5 billion yuan ($1.8 billion) in chip development. The company's semiconductor team now employs over 2,500 specialists.
This investment aligns with China's broader push for technological self-reliance in the semiconductor sector, particularly as global competition intensifies. The global semiconductor industry is projected to reach $697 billion in sales in 2025, with AI-driven technologies spurring heightened demand for next-generation chips. For Xiaomi, developing in-house chips could reduce its dependence on U.S. suppliers like Qualcomm, which has traditionally provided processors for its flagship smartphones.
The Xring O1 represents not just a technological milestone for Xiaomi, but a strategic move in the increasingly competitive and geopolitically complex semiconductor landscape, where Chinese companies are working to establish domestic capabilities amid ongoing export restrictions from the United States.