China’s Xiaomi to invest nearly $7 bn in chips

Chinese technology conglomerate Xiaomi will allocate 50 billion yuan ($6.9 billion) towards the development of advanced smartphone chips, the company’s founder announced on Monday.

Xiaomi, a prominent Chinese consumer electronics firm with a diverse product portfolio ranging from smartphones to vacuum cleaners and electric vehicles, is making a significant commitment to semiconductor technology.

In a post on the social media platform WeChat commemorating the company’s 15th anniversary, Lei Jun stated, “Chips are the fundamental core area for Xiaomi to achieve breakthroughs in cutting-edge technology, and therefore, we will dedicate our full efforts to this endeavor.”

Outlining Xiaomi’s ambitions in the semiconductor sector, Mr. Lei added that the firm has formulated an investment strategy encompassing “at least 10 years of investment and a minimum of 50 billion yuan.”

Xiaomi’s initial foray into smartphone semiconductors involved the launch of its first proprietary chip, the Surge S1, in 2017.

However, the company was subsequently compelled to cease production of this chip due to technical and financial challenges. Since then, Xiaomi has redirected its focus towards other component technologies, as well as its recent entry into the electric vehicle market.

“That is not our ‘dark history’. That is the path we have travelled,” Mr. Lei wrote on Monday.

Since 2021, Xiaomi’s chip development program has already received 13.5 billion yuan in research and development funding, supporting a team of over 2,500 employees, the billionaire entrepreneur noted.

This announcement comes amidst escalating technological tensions between Beijing and Washington, as both nations strive to secure access to the most sophisticated components.

Numerous Chinese companies are actively pursuing the development of their own chip technologies with the aim of reducing their dependence on foreign suppliers in the face of this intensifying rivalry.

“Xiaomi has always harbored a ‘chip dream’,” Mr. Lei wrote, concluding, “I earnestly request everyone to grant us more time and patience to support our continued exploration on this path.”