Xiaomi Commits $6.9 Billion to In-House Chips, Unveils Next-Gen Xring O1 SoC

preCharge News BUSINESS — Chinese technology powerhouse Xiaomi has announced plans to invest 50 billion yuan (approximately $6.9 billion) over the next decade to develop its own semiconductors, CEO Lei Jun revealed in a Weibo post on Monday. The move underscores Xiaomi’s determination to reduce its reliance on foreign chip suppliers, especially as U.S.-China trade tensions continue to disrupt global supply chains.

The $6.9 Billion Bet on Semiconductor Independence

From Snapdragon to Self-Reliance

Xiaomi’s 50 billion yuan commitment will kick off in 2025, a company spokesperson confirmed, signaling a bold step toward self-reliance in chip design. This push comes as the U.S. tightens export controls on critical semiconductors, threatening the tech ambitions of Chinese firms. Until now, Xiaomi has relied heavily on Qualcomm for the chips powering its flagship smartphones, including the widely-used Snapdragon line.

However, Xiaomi’s in-house Xring O1, a 3-nanometer system-on-chip (SoC), aims to change that dynamic. Slated for an official debut on Thursday, the Xring O1 is expected to power Xiaomi’s next-generation smartphones, placing it in direct competition with Apple’s A18 Pro and Samsung’s Exynos 2500, which also use advanced 3nm manufacturing processes.

What Sets the Xring O1 Apart?

Advanced Design for Cutting-Edge Performance

A system-on-chip, or SoC, integrates multiple components—like processors, memory, and wireless connectivity—into a single unit, offering better performance and efficiency than traditional chip designs. This approach allows manufacturers to tightly integrate hardware and software, potentially creating a more seamless user experience.

Xiaomi’s first attempt at in-house chipmaking, the Surge S1, launched in 2017 but failed to gain significant market traction. The Xring O1 represents a more ambitious effort, aiming to power not just smartphones but also tablets and potentially electric vehicles. Lei hinted that Thursday’s event could see the unveiling of multiple new devices, including a smartphone, tablet, and even an electric car.

Industry Reaction: Qualcomm Responds

“We Remain a Strategic Supplier”

Despite Xiaomi’s high-profile chip push, Qualcomm CEO Cristiano Amon downplayed the potential impact on his company’s business. “We remain a strategic supplier of chips for Xiaomi, and most importantly, Qualcomm Snapdragon chips will continue to be used in Xiaomi’s flagship devices,” Amon told preCharge News on Monday.

Qualcomm’s confidence reflects the significant technical and financial hurdles involved in building competitive SoCs, which only a handful of companies, including Apple, Samsung, and Huawei, have successfully managed.

Xiaomi’s Semiconductor Gamble: High Risk, High Reward

A Strategic Play for Long-Term Dominance

Investing in in-house chips allows Xiaomi to tightly integrate its hardware and software, potentially creating a differentiated user experience and reducing costs over time. However, it also carries substantial financial risks, given the complexity and expense of semiconductor design.

With its Xring O1, Xiaomi is betting it can break into the elite club of self-reliant smartphone makers, potentially reshaping the competitive landscape in the process. The stakes are high, but so too are the potential rewards as the company seeks to reduce its dependence on Western suppliers amid ongoing trade friction.