Xiaomi, a global tech giant, is making great strides in its quest for technological independence. The company is currently developing its own smartphone chipset – as stated by reputable leaker Yogesh Brar – a strategic move aimed at reducing dependence on external suppliers and improving its competitive advantage in the rapidly evolving market.

While the official name has not been revealed, the chipset is expected to be manufactured on TSMC’s 4nm N4P process. Although this technology is a generation behind the cutting-edge nodes used by rivals like Qualcomm and MediaTek, it offers a balance between performance and cost-effectiveness. Despite using a slightly older manufacturing process, the chipset is expected to deliver impressive performance and efficiency. It is rumored to be on par with the Snapdragon 8 Gen 1 used in phones like the Galaxy S22, and will likely be used in Xiaomi’s mid-range phones rather than its flagship models.

In addition, Xiaomi’s chip will likely be equipped with a 5G modem from Unisoc, another Chinese technology company. This combination will allow Xiaomi’s chipset to effectively compete in the mid-range smartphone segment.

Strategic justification

Xiaomi’s decision to invest in a custom chipset is based on several strategic factors. First, the rising costs of off-the-shelf chipsets, such as the expected price premium for the Snapdragon 8 Gen 4, have made developing an in-house solution more attractive.

Second, the possibility of greater control over the supply chain and product differentiation is a significant advantage. By developing and manufacturing its own chipset, Xiaomi can tailor its hardware to specific market needs and avoid the risks associated with dependence on external suppliers.

Third, this move is in line with Xiaomi’s broader ambition to establish itself as a technology leader. Developing a custom chipset demonstrates the company’s commitment to innovation and its ability to compete on a global scale.

Challenges and opportunities

While developing a custom chipset presents numerous opportunities, it also comes with challenges. The high research and development costs, potential manufacturing hurdles, and the risk of delays or performance issues are factors that must be carefully weighed. However, the potential benefits of a successful chipset project are significant. A well-executed strategy could improve Xiaomi’s brand reputation, increase profit margins, and cement its position as a major player in the smartphone market.

Xiaomi’s ambitious foray into chipset development is a testament to its growing technological capabilities and strategic vision. By investing in a bespoke solution, the company is positioning itself for long-term success in an increasingly competitive market. While the road ahead may be difficult, the potential benefits of this venture make it a worthwhile gamble for the Chinese tech giant.