Xiaomi’s XRING 01 Does Not Mean It Will Immediately Cut Off Sourcing From Qualcomm & MediaTek, As An Estimate Reveals That 40 Percent Of The Company’s Smartphones Use ‘Off The Shelf’ Parts

The arrival of the XRING 01 is a message from Xiaomi that it is fully prepared and equipped to design and manufacture custom chipsets, securing a new milestone by becoming the first Chinese firm to successfully commercialize a 3nm SoC. While the new silicon’s launch would indicate that the company is ready to wave goodbye to its partners Qualcomm and MediaTek, a new estimate reveals that it may take several years before Xiaomi is completely self-sufficient in making its own chipsets. For now, around 40 percent of the company’s smartphones feature parts from the aforementioned names.

Relying on Qualcomm and MediaTek for future chipsets might still be a necessity, considering that the U.S. has not voiced its concern for Xiaomi’s XRING 01

Currently, the XRING 01 powers the Xiaomi 15S Pro and the Xiaomi Pad 7 Ultra, and there is no mention of whether the custom SoC will make its way to other devices. The company has not mentioned how many units it intends to manufacture but utilizing the second-generation 3nm process from TSMC, also known as ‘N3E,’ is a costly decision, not to mention that the tape-out process likely racked up a bill of millions for Xiaomi.

In the long run, it is cheaper to make your own chipsets as opposed to sourcing from Qualcomm or MediaTek, but in the initial stages, where a ton of trial and error is involved, there is no question that Xiaomi’s investment of billions was absolutely crucial. However, the company has barely scratched the surface, and until it has successfully adopted its in-house silicon for at least a couple of generations, we doubt the partnership with Qualcomm and MediaTek will evaporate.

In fact, CNBC reports that, according to Counterpoint Research Partner Niel Shah, 40 percent of Xiaomi smartphones continue to feature chipsets from Qualcomm and MediaTek. These two might be included in Xiaomi’s supply chain for a little longer because of the potential U.S. export controls looming over the company’s head like the sword of Damocles. The XRING 01 represents not just a victory for Xiaomi but also for China, and leveraging TSMC’s advanced lithography will probably not go unnoticed by the Trump administration.

There is the possibility that TSMC is barred from doing business with Xiaomi for fear that the latter’s technology could be distributed to other Chinese firms and give them an edge in the technological race. The problem is that the global landscape is too unpredictable to make such assumptions, so we must see what fate awaits Xiaomi in the future.

News Source: CNBC

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