XRing O1 result of $1.9b investment by tech major seeking semiconductor edge

Xiaomi Corp said on Monday that it will unveil its 3-nanometer XRing O1 chip for smartphones on Thursday, marking the company's revived ambitions to bolster its semiconductor prowess.

The new chip, a result of over four years of intensive research and development efforts, will position Xiaomi to compete directly with leading global chip designers, but it remains to be seen how the actual products will perform on handsets, experts said.

Lei Jun, CEO and chairman of Xiaomi, said via a post on Sina Weibo that the company's cumulative investment in the XRing O1 chips had exceeded 13.5 billion yuan ($1.9 billion) by the end of April.

The investment is part of Xiaomi's broader ambition to invest 50 billion yuan into chip R&D from 2021 to 2031.

Xiaomi now has a 2,500-strong semiconductor R&D team driving innovation, enforcing its position among China's top three chip design firms in both R&D spending and team scale, Lei said.

The company's top executive also emphasized the significance of the achievement.

"Reaching this milestone demanded unwavering commitment, courage and substantial technical and financial resources. The XRing O1 marks just the beginning of our journey to redefine high-end semiconductor capabilities in the global market."

XRing O1 is Xiaomi's dramatic comeback in the high-stakes arena of advanced chip design after an 11-year journey marred by setbacks and reinvention. In 2014, Xiaomi launched its inaugural semiconductor project — code-named Surge — targeting mid-to-high-end mobile chips, Lei recalled.

In 2017, Xiaomi debuted its Surge S1 System-on-Chip (SoC) for smartphones, but commercial challenges forced a strategic retreat from large-scale chip development. After the setback, Xiaomi shifted focus to "small chips", releasing over a dozen specialized semiconductors for fast charging, imaging, battery management and 5G connectivity, while quietly honing R&D expertise.

Concurrent with its electric vehicle venture, Xiaomi secretly greenlit the XRing project in 2021 to reboot flagship SoC development, vowing to conquer cutting-edge process nodes.

"We aim to develop chips with the most advanced chip manufacturing prowess, and first-tier performance and efficiency, aligning with Xiaomi's premium device strategy," Lei added.

Xiang Ligang, director-general of the Zhongguancun Modern Information Consumer Application Industry Technology Alliance, a telecom industry association, said Xiaomi's attempts to make inroads into the competitive chip industry highlight its determination to differentiate its products from a crowd of rivals and to seek growth via innovation.

In the first quarter, Xiaomi was the third-largest smartphone vendor worldwide, only behind Samsung and Apple, in terms of smartphone shipments, according to market research firm TechInsights.

Xiaomi accounted for 14.1 percent of the global smartphone market, with about 42 million smartphones shipped out of factories to retailers worldwide from January to March, marking a 2.7 percent year-on-year growth, TechInsights said.

Xiaomi is one of a growing number of Chinese companies that are devoting a large amount of resources to the semiconductor sector, as they increasingly realize the importance of chips in driving innovation, experts added.