Xiaomi launches in-house XRing O1 chipset to enter high-end SoC arena

Xiaomi began commercializing its self-developed chips in 2017 and has since launched multiple chips for commercial use. With the recent release of the XRing O1, the company has officially entered the high-end SoC arena. The XRing SoC adopts a design combining a self-developed AP (application processor) and a third-party external baseband, accelerating the commercialization process of high-end SoCs. Xiaomi remains committed to deepening its efforts in the chip sector to achieve an end-to-end business. But as its flagship chip is still in its early stages, it needs prolonged market validation and cost optimization. Thus its impact on the current chip supply landscape remains limited for now, and the company will still need to maintain long-term partnerships with third-party chip suppliers.

Xiaomi has already released several chips

In 2017, Xiaomi launched its first self-developed 4G smartphone SoC, the Surge S1. Built on a 28nm process, this chip was used in the Xiaomi 5c but failed to see iterative updates due to market factors. But Xiaomi didn’t abandon its chip development efforts – instead, it shifted focus to less technically challenging specialized small chips. Starting in 2021, Xiaomi began commercially deploying multiple in-house small chips across its product lineup, covering areas such as image processing, power management and signal enhancement. This move provided valuable hands-on experience for future chip development. After eight years of technological accumulation, Xiaomi recently unveiled its brand-new, self-developed flagship SoC – the Surge O1. Manufactured using the cutting-edge 3nm process, this chip innovatively combines Xiaomi’s self-developed AP architecture with a third-party external modem, delivering performance on a par with current flagship chips on the market. Notably, Xiaomi has now become China’s second smartphone manufacturer – after Huawei – to achieve mass production and commercialization of a flagship SoC. This milestone marks another solid step forward for China in the realm of high-end chip innovation.

A self-developed AP and a third-party modem chip represents the best path for Xiaomi’s SoC development

Currently, adopting a self-developed AP paired with a third-party modem chip represents the optimal path for Xiaomi’s SoC development. This strategic decision stems from three major challenges in developing modem chips in-house:

• First, high patent barriers. Modem technology patents are heavily concentrated in the hands of a few industry giants, namely Qualcomm, MediaTek, UNISOC and Huawei. If Xiaomi were to develop its own modem, it would face an uphill patent battle – either requiring entirely new patent workarounds or incurring substantial licensing fees.
• Second, prohibitive global adaptation costs. To achieve full-band network support while maintaining backward compatibility with 4G, 3G and 2G networks, deep collaboration with global telecom equipment providers and carriers is essential. This process involves extensive compatibility testing with numerous base station manufacturers, alongside billions in investment and years of continuous optimization.
• Third, extreme communication complexity. Real-world wireless environments vary drastically, requiring long-term, large-scale field testing and iterative refinement to ensure stable signal reception under diverse conditions.

Notably, apart from Huawei and Samsung, which possess integrated modem capabilities, most smartphone manufacturers worldwide rely on external modem solutions. This further validates the practicality of Xiaomi’s chosen approach.

The strategic significance of Xiaomi’s entry into the chip industry

Xiaomi’s sustained investment in chip R&D holds strategic significance in three key aspects:

• First, building an integrated hardware and software ecosystem. Xiaomi has established a comprehensive product portfolio spanning smart EVs, smartphones, tablets, PCs, wearables, smart TVs and IoT devices, driving exponential growth in chip demand. By developing in-house chips, Xiaomi can create a self-sufficient supply chain, fundamentally securing product availability.
• Second, enabling cross-device synergy. Leveraging the HyperOS operating system and the capabilities of self-developed chips, Xiaomi’s product matrix will achieve unprecedented hardware-software integration. This deep-level optimization not only enhances seamless connectivity between devices but also delivers smoother, more intelligent cross-scenario interactions for users.
• Third, strengthening technological leadership. In the semiconductor industry, advanced-node SoC development capability is regarded as a benchmark of technological prowess. Through persistent chip R&D, Xiaomi not only achieves product differentiation but also cultivates a premium technology brand image with a higher value perception. This technological moat will establish long-term competitive advantages in global markets.

Xiaomi adopted a diversified supply pattern for its smartphone SoC

According to Omdia’s Smartphone Tech Monitor report, Xiaomi’s smartphone SoC chips were entirely sourced from third-party suppliers in 2024. The supply landscape shows a diversified pattern. MediaTek dominated as the primary supplier, with its SoCs powering 63% of Xiaomi smartphones. Qualcomm ranked second with a 35% share, mainly supporting Xiaomi’s mid-range and premium models. UNISOC, representing domestic chipmakers, secured 2% of the supply.

Breaking down by price segment: MediaTek SoCs power 95% of Xiaomi smartphones priced below US$400, with only 5% used in devices above this threshold. Qualcomm SoCs show a stronger presence in premium devices, with 20% deployed in Xiaomi smartphones priced above US$400.

Based on published technical specifications, Xiaomi’s Surge O1 chip adopts a high-frequency mega-core architecture with an ultra-large cache design, achieving benchmark scores that surpass some current flagship chips on the market. Reports indicate the chip will debut in two premium product lines: the Xiaomi S15 Pro flagship smartphone and the Xiaomi Pad 7 Ultra.

As a first-generation product, its primary mission is technological validation, with production volume conservatively projected at several hundred thousand units. Due to small-scale tape-outs, initial costs will remain high. Omdia data reveals that in 2024 Xiaomi shipped 19.5 million units with Qualcomm Snapdragon 8 series chips and 3.7 million units with MediaTek Dimensity 9000 series chips

Given these figures, Xiaomi’s in-house chips – still undergoing multi-generation market validation and cost optimization – are unlikely to significantly affect its existing flagship SoC supply landscape in the short term. Thus concerns about affecting relationships with third-party chip suppliers are unwarranted. Xiaomi must maintain close collaboration with these partners.