Xiaomi is taking significant steps to reduce its reliance on potentially more expensive chip suppliers by embarking on a plan to produce its own custom chips. According to the latest reports, the company is slated to launch its first 3nm chip next year, which could pose a competitive challenge for others in the industry, primarily due to potential advantages in pricing strategies.
In October, Xiaomi completed the development of its inaugural 3nm chip and is currently seeking a manufacturing partner to facilitate mass production. However, the path forward presents several challenges. One of the main obstacles is securing a reliable manufacturing partner, as TSMC, a leading chip manufacturer, has recently announced it will no longer accept orders for chips at 7nm or lower from Chinese customers. This restriction could significantly impact Xiaomi’s plans, especially since TSMC remains its primary option for mass production, given Samsung’s ongoing difficulties in ramping up the productivity of its 3nm GAA technology.
Additionally, Xiaomi is facing regulatory hurdles with U.S. authorities, requiring the company to obtain a license before receiving chip shipments from TSMC. In a related development, it was reported in August that Xiaomi plans to introduce custom silicon using TSMC’s 4nm N4P process in the first half of 2025. This chip is anticipated to deliver performance similar to Qualcomm’s Snapdragon 8 Gen 1.
Overall, Xiaomi’s venture into advanced chip production could potentially reshape the smartphone industry landscape in the coming year. By saving costs on processor chips, Xiaomi aims to enhance its reputation for offering high-end smartphones at competitive prices, making its products even more appealing to consumers.
