Xiaomi has introduced the Xring O3, a custom smartphone processor built to power its next flagship folding phone. The new silicon uses TSMC 3nm manufacturing technology to handle graphics, computing, and artificial intelligence on a single chip. It marks the company's biggest effort yet to cut its reliance on Qualcomm and MediaTek.
The company is aiming initial shipments of the new processor at 200,000 to 300,000 folding handsets. Breaking into the premium folding sector will not be easy. Huawei currently commands 68% of the Chinese foldable market, with Honor holding 13.7% and Oppo taking 8.5%. Putting custom silicon into foldables gives Xiaomi direct control over hardware features while trying to win over high end buyers.
Building proprietary chips is an expensive long term wager. Xiaomi plans to spend at least 50 billion yuan, roughly $7 billion, over a decade on internal chip design. The company has already poured more than 20 billion yuan into the effort and expanded its semiconductor design team to over 3,000 engineers. Previous silicon efforts bore fruit with the earlier Xring O1, which passed 1,000,000 total shipments across phones, tablets, and smartwatches.
Smartphones are only part of the broader silicon roadmap. Supply chain sources indicate that Xiaomi is also working with TSMC on 2 other custom processors. The Xring O100 is a 6nm neural processing unit designed to run the MiMo large language model locally on consumer devices. For smart vehicles, the company developed the Xring D100, a 3nm processor dedicated to autonomous driving. While the O3 is already in mass production, both the automotive chip and the standalone neural unit are slated for rollouts next year.
This silicon push arrives as phone makers face a tough economic climate. Industry forecasts from IDC project a 14% drop in global smartphone shipments this year. Higher component and memory expenses have forced retail prices up across the board. Market tracker Visible Alpha reports that Xiaomi sold 65 million phones during the first half of the year at an average selling price of 1,329 yuan. Expanding in house silicon helps the company manage component costs while supporting its growing electric vehicle wing, which delivered 104,199 cars in the second quarter alone.
