China's Xiaomi is planning a next-gen phone chip, but won't release one yearly like Apple

Xiaomi, the Chinese tech powerhouse, is gearing up to develop a new high-end chip for its smartphones, according to a senior executive's statements made to CNBC. However, unlike its competitor Apple, Xiaomi does not plan to launch a new chip every year. Xu Fei, Xiaomi's vice president, shared insights into the company's semiconductor ambitions and detailed their product roadmap. This strategic move mirrors efforts from other leading smartphone manufacturers, including Apple, Samsung, and Huawei, as Xiaomi aims to enhance its global market presence, particularly in the premium segment. Last year, the company introduced the XRing 01, a system-on-chip (SoC) designed for its smartphones, utilizing a cutting-edge 3-nanometer manufacturing process. This type of chip integrates multiple components essential for device operation. Xiaomi has committed to investing at least 50 billion yuan (approximately $7 billion) over the next decade to bolster its chip development efforts. While Xu indicated that the company is proactively planning for its next-generation chip, she cautioned against the expectation of annual releases. "We are newcomers in this field, and we need time to learn and strategize," Xu stated. Apple's annual release of its A series chips, which began in 2010 and includes the latest A19 used in the iPhone 17, sets a high bar in the industry. Xu elaborated on Xiaomi’s release strategy, emphasizing the importance of achieving a favorable return on investment. Although the firm plans to ship 1 million units of the XRing 01, it needs to scale production to 10 million units per chip release to reach breakeven. "We recognize that we may require ten years of patience for the SoC to become profitable," Xu remarked. The SoC serves as a vital component of smartphones, functioning as the device's brain. Apple's success in chip design is attributed to its ability to tightly integrate hardware with software, enhancing user experience. Xiaomi aims to replicate this model with its Android-based operating system, HyperOS, and its suite of AI applications, HyperAI. A custom chip could optimize the performance of this software ecosystem. Neil Shah, a partner at Counterpoint Research, noted that this development could lead to a more integrated experience akin to those offered by Apple and Google. In addition to smartphones, Xiaomi's diverse product range includes smartwatches, home appliances, and electric vehicles. The expertise gained from developing a smartphone SoC will be invaluable for creating silicon for these other products, according to Shah. Currently, Xiaomi's smartphones utilize chips from Qualcomm and MediaTek, with the newly launched Xiaomi 17 featuring Qualcomm's latest SoC. Xu confirmed that the company will maintain its partnerships with Qualcomm and MediaTek while simultaneously advancing its own semiconductor production. "They are exceptional partners with whom we have collaborated for 15 years, and we plan to continue this dual approach," Xu remarked, ensuring partners that there is no cause for concern.