Xiaomi set to join the elite custom chip club with XRING O1

Xiaomi Corp is poised to join Apple, Huawei, and Samsung in developing smartphone chips.

The XRING O1, Xiaomi's first in-house System-on-Chip (SoC), will be unveiled later this month, according to a Weibo post by CEO Lei Jun on Thursday night.

For years, Xiaomi has relied on CPUs from US-based Qualcomm and Taiwan-based MediaTek. This strategic shift into in-house chip development, while representing a large investment and task, offers considerable advantages for smartphone manufacturers.

By controlling the research and manufacturing processes, organizations may improve and customize performance, better manage costs, and have control over product release deadlines – key aspects in China's extremely competitive market.

The move fits Xiaomi's ambitious R&D plan. It announced a 30-billion-yuan (US$4.2 billion) R&D expenditure in 2025. As Lei previously stated, this promise is part of a 105-billion-yuan investment in smartphones, new energy vehicles, AI models, and cross-device systems between 2021 and 2025.

Chinese smartphone producers are striving for in-house chip capabilities, but success is not guaranteed. OPPO shut down Zeku and laid off 3,000 staff in 2023 after discontinuing chip research.

One Chinese smartphone brand with its own processor and OS is Huawei. Xiaomi will become the second Chinese smartphone company to launch a processor.

The announcement lifted Hong Kong-listed Xiaomi shares 1.69 percent to HK$51 (US$6.53) at close on Friday, lifting the company's market cap to HK$1.32 trillion.

Xiaomi ranks third in the worldwide smartphone market behind Apple and Samsung, with a 14 percent market share, according to Counterpoint.