Xiaomi commits $6.9 billion to develop in-house chips amidst tech rivalry

In 2025, Chinese technology company Xiaomi announced a significant investment of 50 billion yuan, equivalent to $6.9 billion, aimed at developing its own semiconductor chips over the next decade. The announcement was made by CEO Lei Jun in a Weibo post on May 19, 2025. The move comes in response to ongoing trade tensions between the United States and China, which have led to restrictions on semiconductor access for Chinese firms. By committing to in-house chip development, Xiaomi seeks to enhance its competitiveness in the smartphone market by reducing reliance on external suppliers. Xiaomi is set to unveil its first self-designed processor, the Xring O1, which will serve as a cornerstone for its flagship smartphones. Despite previously relying on U.S.-based Qualcomm for semiconductor supply, the company’s entry into the semiconductor arena reflects a broader trend among Chinese firms striving for technological sovereignty. Lei's announcement coincides with the anticipated launch of new smartphone models, tablets, and even electric vehicles at an upcoming event. This strategic initiative will allow Xiaomi to integrate hardware and software more effectively and differentiate its products in a highly competitive market. The Xring O1 chip will utilize an advanced 3-nanometer manufacturing process, which is considered one of the most cutting-edge techniques currently available. This places Xiaomi in the company of technology giants like Apple, which employs similar manufacturing for its A18 Pro chips used in their latest iPhone models. The development of the Xring O1 marks Xiaomi's return to designing crucial smartphone components, having previously ventured into alternative semiconductor types for management and imaging applications. The halt in research and development of system-on-chips (SoCs) has now ended, reaffirming Xiaomi's commitment to its technological advancement. Qualcomm's CEO Cristiano Amon reassured stakeholders that the company's business relationship with Xiaomi would remain intact despite the latter's move to develop its own chips. He underscored Qualcomm's strategic role in supplying chips to Xiaomi's flagship devices, a collaborative relationship that is still expected to thrive alongside Xiaomi's self-development endeavors. As very few smartphone manufacturers globally develop their own SoCs due to the complexity and cost, Xiaomi’s investment positions it uniquely in the industry, indicating a shift towards increased autonomy in chip production and further developments in its technology ecosystem.