Xiaomi Unveils New Xring Chip as It Seeks Greater Control Over Smartphone Technology

Xiaomi has unveiled a new generation of its proprietary smartphone processor as the Chinese electronics giant steps up efforts to develop key technologies in-house and reduce its dependence on external chip suppliers. The company announced the Xring O3 on Monday, roughly a year after introducing its first in-house smartphone processor, the Xring O1. The move places Xiaomi among a growing group of major smartphone manufacturers—including Apple, Samsung Electronics and Huawei—that design their own chips to gain greater control over the technology powering their devices. Smartphone processors, commonly known as systems-on-chip, integrate several critical functions, including computing, graphics, artificial intelligence processing and image handling, into a single component. Two people familiar with Xiaomi's plans said Taiwan Semiconductor Manufacturing Co. (TSMC) will manufacture the Xring O3 using its advanced 3-nanometre process. The sources asked not to be identified because the information has not been made public. Xiaomi and TSMC did not immediately respond to requests for comment on the chip's manufacturer, production technology or shipment plans. One source said the O3 is expected to power Xiaomi's next flagship foldable smartphone, with the company targeting shipments of between 200,000 and 300,000 units. The move into the premium foldable-phone market could sharpen Xiaomi's competition with Huawei, which has established a dominant position in China's rapidly developing foldable segment. Huawei shipped about 1.6 million foldable smartphones in China during the second quarter, accounting for 68% of the market, according to research firm Smart Analytics Global. Honor held 13.7% of the market, while Oppo accounted for 8.5%. Xiaomi Bets on Its Own Silicon Xiaomi's chip strategy reflects a wider shift among major device manufacturers, which are increasingly designing their own semiconductors as competition in the premium smartphone market intensifies. Developing processors internally can give manufacturers greater control over product features, allow closer integration between hardware and software and potentially strengthen their negotiating position with suppliers such as Qualcomm and MediaTek. Beijing-based Xiaomi restarted development of large-scale proprietary chips in 2021. The company has said it intends to invest at least 50 billion yuan ($7 billion) in the effort over a decade. The company said on an earnings call last week that cumulative shipments of smartphones, tablets and watches powered by the Xring O1 had exceeded 1 million units since its launch. According to the sources, about 150,000 smartphones using the O1 have been sold since its introduction in May 2025. The O3 represents the latest attempt by Xiaomi to build a broader semiconductor capability that can support its growing ecosystem of consumer electronics and vehicles. Rising Component Costs Add Pressure The investment comes as smartphone manufacturers face a difficult global market, with higher memory and component costs threatening to push up retail prices and weaken consumer demand. Data from Visible Alpha by S&P Global showed that Xiaomi sold about 65 million smartphones during the first half of 2026, at an average selling price of 1,329 yuan ($197.74). That compared with 84 million units at an average price of 1,141 yuan during the first half of 2025 and 83 million units at 1,123 yuan during the same period of 2024. Global smartphone shipments are forecast to fall 14% in 2026, according to research firm International Data Corporation, adding pressure on manufacturers to differentiate their products while managing increasingly expensive components. For Xiaomi, proprietary chips could offer a way to exercise more control over costs, performance and product design as the company competes across increasingly diverse hardware categories. Xring Expansion Beyond Smartphones Xiaomi's semiconductor ambitions extend beyond smartphone processors. A third source said the company had also contracted TSMC to manufacture two additional Xring chips: the Xring O100 , a 6-nanometre neural-processing unit designed to support Xiaomi's MiMo large language model on consumer devices, and the Xring D100 , a 3-nanometre processor intended for autonomous-driving applications. Xiaomi has invested more than 20 billion yuan ($3 billion) in Xring chip development so far, the source said. Its semiconductor design workforce has also expanded to more than 3,000 employees, from about 2,500 a year earlier. According to Xiaomi, the Xring O3 has already entered mass production, while development of the O100 and D100 has been completed, with both expected to be deployed next year. The semiconductor push is part of a broader transformation at Xiaomi, which has expanded beyond smartphones into electric vehicles and other connected products. Its electric-vehicle business generated 23.9 billion yuan in revenue in the second quarter and delivered 104,199 vehicles, highlighting the growing range of products that could eventually benefit from the company's expanding in-house chip capabilities. As Xiaomi moves deeper into premium smartphones, artificial intelligence and electric vehicles, the development of its own processors could become increasingly important—not only as a technology strategy, but also as a means of securing critical components in an industry where supply-chain control has become a major competitive advantage.