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Xiaomi (XIACY) is taking its biggest swing yet at chip independencepledging a massive 50 billion yuan ($6.9 billion) investment over the next decade to build out its own mobile processor empire. The Chinese smartphone and EV giant is set to debut its first in-house chip, the Xring O1, on May 22. Built on second-gen 3nm tech, the chip won't be manufactured by domestic foundry SMIC, which is still stuck at 7nm. That suggests Xiaomi may be quietly partnering with a more advanced overseas foundrypossibly in Taiwan or South Koreato get ahead of its domestic rivals.
Founder Lei Jun is framing this as a non-negotiable strategic priority. "A peak we need to climb. A hard battle we can't escape," he wrote. The move mirrors Apple's approach of controlling both hardware and software to tighten ecosystem integration. Xiaomi has already sunk over 13.5 billion yuan into chip R&D and built a 2,500-person semiconductor team. With Huawei struggling to secure advanced chips and Qualcomm still dominating the Android flagship space, Xiaomi's play could change the power dynamicsnot overnight, but the foundation is being laid.
The timing is no coincidence. Xiaomi's smartphone margins have been under pressure, and its EV ambitions hit a bump after a fatal SU7 crash earlier this year. That's pushed Lei to double down on core tech as the company's next growth lever. If successful, the Xring chip won't just power Xiaomi's future phonesit could unlock a path to becoming China's version of Apple, controlling its stack from chip to chassis. Investors watching China's tech race should keep this chip rollout on their radar. It could be a slow burn, but it's one that might catch fire.
This article first appeared on GuruFocus.