Xiaomi Plans to Invest nearly $7 Billion in Semiconductors

Chinese tech giant Xiaomi will spend 50 billion yuan ($6.9 billion) to develop advanced smartphone chips, its founder announced on Monday.

Xiaomi, known for its wide range of products from smartphones to vacuum cleaners and electric vehicles, is among China’s leading consumer electronics companies.

Xiaomi’s Commitment to Advancing Cutting-Edge Technology Through Chips

“Chips are the fundamental path for Xiaomi to advance in cutting-edge technology, so we are fully committed,” founder Lei Jun stated on social media, as the company marked its 15th anniversary.

To realize Xiaomi’s semiconductor goals, the company has outlined a plan requiring “at least 10 years of investment and a minimum of 50 billion yuan,” he added.

Xiaomi took its first steps into smartphone semiconductor development with the release of its first in-house chip, the Surge S1, in 2017. However, due to technical and financial challenges, the company had to halt production of the chip and shift focus to other components and electric vehicles.

Lei Jun addressed this on Monday, stating, “That is not our ‘dark history.’ That is the path we have traveled.“

13.5 Billion Yuan Investment and a 2,500-Strong Team

Since 2021, Xiaomi’s chip development initiative has received 13.5 billion yuan in R&D funding, supporting a team of over 2,500 employees, according to the billionaire founder.

This announcement comes as both China and the U.S. work to secure access to the most advanced components. “Xiaomi has always had a ‘chip dream,‘” Lei wrote, urging, “I earnestly request everyone to give us more time and patience to support our continued exploration on this road.“

Chinese Companies Race to Develop Domestic Chips and Reduce Dependence on Foreign Suppliers

Several Chinese companies are racing to develop their own chips in a bid to reduce dependence on foreign suppliers amid growing competition.

In 2023, Huawei, a major tech giant and Xiaomi competitor, introduced a high-performance smartphone featuring a chip that experts say couldn’t be produced without foreign technologies, sparking concerns about the effectiveness of U.S. restrictions.

“This move could potentially lead to the rise of new champions capable of competing with American firms like Qualcomm,” said Pascal Viaud, CEO of consulting firm Ubik, in an interview with AFP.

Additionally, Beijing has been encouraging companies to lessen their reliance on foreign technologies. Last month, Chinese President Xi Jinping urged businesses to focus on achieving “self-reliance” in the sector.

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