The arrival of the XRING 01 signifies a major milestone for Xiaomi, as it becomes the first Chinese company to successfully commercialize a 3nm System-on-Chip (SoC). This achievement demonstrates Xiaomi's capability to design and manufacture custom chipsets, marking a significant step in the competitive landscape of the tech industry. While this launch suggests that Xiaomi is prepared to reduce its reliance on partners like Qualcomm and MediaTek, industry estimates indicate that it may take several years before Xiaomi can fully transition to complete self-sufficiency in chipset production.
As of now, approximately 40 percent of Xiaomi's smartphones still utilize components from Qualcomm and MediaTek. This reliance is likely to persist, especially considering the geopolitical landscape and the lack of clear communication from the U.S. regarding the XRING 01. The ongoing partnership with these suppliers suggests that while Xiaomi has made significant strides in its chipset development, it is not yet ready to sever ties completely.
The XRING 01 currently powers popular devices like the Xiaomi 15S Pro and the Xiaomi Pad 7 Ultra. However, there has been no announcement regarding the expansion of this custom SoC to other models. The company has not disclosed its production targets, which raises questions about the long-term implications of this investment.
Utilizing TSMC's second-generation 3nm process, known as ‘N3E,’ is a costly endeavor for Xiaomi. The tape-out process alone likely incurred expenses in the millions. Although manufacturing in-house chipsets may prove to be more economical in the long run, the initial phase—characterized by extensive trial and error—requires significant financial investment. Xiaomi's commitment of billions towards this initiative underscores its importance for the company's future.
Despite these advancements, Xiaomi has only scratched the surface of its chipset ambitions. Until the company successfully integrates its in-house silicon across multiple generations of devices, it is unlikely to fully abandon its partnerships with Qualcomm and MediaTek. According to CNBC and insights from Counterpoint Research Partner Niel Shah, the continued use of Qualcomm and MediaTek chipsets in 40 percent of Xiaomi's smartphones indicates that the company will need these external suppliers for the foreseeable future.
The XRING 01 is not just a technical triumph for Xiaomi; it also has broader implications for the Chinese tech sector. By leveraging TSMC’s advanced lithography technology, Xiaomi's success could attract scrutiny from the U.S. government, especially considering potential export controls that may affect the company’s operations. The possibility that TSMC could be restricted from doing business with Xiaomi raises concerns that the company's technology might inadvertently benefit other Chinese firms in the competitive tech race.
As the global landscape continues to evolve, the future remains uncertain for Xiaomi and its chipset endeavors. The company’s path will depend on navigating these challenges while capitalizing on its recent technological advancements. Only time will tell how well Xiaomi can balance its ambitions with the realities of the current geopolitical climate.
