Xiaomi has unveiled its latest in-house smartphone processor, the Xring O3, as the Chinese smartphone maker seeks greater control over key components and less reliance on external chip suppliers.
The new processor marks another step in Xiaomi’s effort to develop its own semiconductor technology, following the launch of its first proprietary chip, the Xring O1, in 2025. The move puts Xiaomi alongside major rivals including Apple, Samsung Electronics and Huawei, which have also invested heavily in developing their own smartphone processors.
TSMC to Manufacture Xring O3
Taiwan Semiconductor Manufacturing Co. (TSMC) will manufacture the Xring O3 using its advanced 3-nanometre production technology, according to two people familiar with the matter.
Developing processors in-house could give Xiaomi greater control over product features while strengthening its negotiating position with chip suppliers.
One source said the Xring O3 is expected to power Xiaomi’s upcoming flagship foldable smartphone, with the company targeting shipments of between 200,000 and 300,000 units.
Xiaomi’s growing presence in the foldable-phone market could increase competition with Huawei, which remains a dominant player in China’s premium foldable segment.
Huawei shipped about 1.6 million foldable phones in China during the second quarter, giving it a 68% market share, according to research firm Smart Analytics Global. Honor held 13.7%, while Oppo accounted for 8.5%.
Smartphone Makers Develop Their Own Chips
Xiaomi’s investment in proprietary processors reflects a wider industry trend as smartphone manufacturers look for ways to differentiate their devices and reduce dependence on suppliers such as Qualcomm and MediaTek.
The Beijing-based company restarted development of large, in-house chips in 2021 and has pledged to invest at least 50 billion yuan ($7 billion) over the next decade in the effort.
Xiaomi said last week that cumulative shipments of devices powered by the Xring O1—including smartphones, tablets and smartwatches—had exceeded 1 million units since its launch.
Sources said Xiaomi has sold around 150,000 smartphones equipped with the Xring O1 since its May 2025 launch.
Rising Memory Costs Add Pressure
The chip push comes as smartphone makers face weaker global demand and rising memory and component costs, which are contributing to higher device prices.
Xiaomi sold about 65 million smartphones in the first half of 2026 at an average price of 1,329 yuan ($197.74), compared with 84 million units at an average price of 1,141 yuan during the same period in 2025.
Global smartphone shipments are forecast to fall 14% in 2026, according to research firm International Data Corporation, adding further pressure on manufacturers to control costs and strengthen their supply chains.
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