Chinese tech firm Xiaomi to invest $6.9B to develop homegrown chips

ISTANBUL

Xiaomi, one of China's biggest tech firms, will invest at least 50 billion yuan (about $6.93 billion) to develop its own chips over the next decade, the CEO Lei Jun announced on social media Monday.

Lei said the company hopes to create a big impression when it unveils the Xring O1 on Thursday, a system-on-chip (SOC) that will power Xiaomi's next smartphone.

"Xiaomi has always had a 'chip dream' because, in order to become a great hard-core technology company, chips are a peak that must be climbed and a tough battle that cannot be avoided," Lei said.

"We have deeply summarized the lessons learned from the first chip manufacturing. We found that only by making high-end flagship SoCs can we truly master advanced chip technology and better support our high-end strategy," he added.

The primary source of SoCs for Xiaomi's flagship smartphones has been the US firm Qualcomm, which sells chips under the Snapdragon name.

Xiaomi is anticipated to introduce an electric vehicle, a new tablet, and a smartphone on Thursday.

This is the latest action taken by a Chinese company to increase its reliance on domestic technology in the midst of the continuing trade war between the US and China, in which Washington has restricted access to certain semiconductors for businesses in the second-largest economy in the world.

In January, the US announced a new chip rule, which imposed security restrictions for access to top-tier American technology, the legislation aimed to keep China from obtaining AI chip technology through middlemen and to draw other countries into the US’ orbit.

In the latest move, the US banned chip giant Nvidia from selling its H20 chips to China for the "indefinite future" last month.