Chinese smartphone maker Xiaomi has unveiled a new in-house smartphone processor, Xring O3, as it expands its push to design more of the key components used in its devices. The company is seeking greater control over its technology and supply chain while reducing reliance on external chip suppliers such as Qualcomm and MediaTek. The new processor comes about a year after Xiaomi introduced its first proprietary smartphone chip, Xring O1, marking a deeper move into semiconductor design.
The Xring O3 is expected to be manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC) using a 3-nanometre process, according to people familiar with the matter. One source said the processor could power Xiaomi’s upcoming flagship foldable smartphone, with a shipment target of between 200,000 and 300,000 units. Xiaomi and TSMC had not immediately commented on the manufacturing details. The move puts Xiaomi alongside Apple, Samsung and Huawei, which have increasingly invested in proprietary silicon to differentiate their devices and gain greater control over critical technology.
Xiaomi Expands Its In-House Chip Strategy
Xiaomi’s introduction of the Xring O3 represents the next stage of its semiconductor ambitions. The company launched the Xring O1 in May 2025 as its first proprietary smartphone processor, beginning a strategy aimed at reducing dependence on third-party chipmakers.
Smartphone processors, commonly known as system-on-chips, combine several important functions into a single component. These can include central processing, graphics, artificial intelligence processing and image-related workloads. Developing such chips gives device manufacturers greater control over how hardware and software work together.
For Xiaomi, the strategy could become increasingly important as competition in the premium smartphone market intensifies. Instead of relying entirely on processors designed by Qualcomm or MediaTek, Xiaomi can use its own silicon to develop features specifically optimized for its devices and software ecosystem.
What Is the Xring O3?
The Xring O3 is the latest smartphone processor in Xiaomi’s Xring family. The chip is expected to use TSMC’s 3-nanometre manufacturing technology, putting it among the most advanced smartphone processors currently being developed.
A smaller manufacturing process can potentially improve power efficiency and performance by allowing more transistors to be packed into a given area. However, the manufacturing node alone does not determine a processor’s real-world performance. Architecture, software optimization, thermal management, memory configuration and other system components also play important roles.
| Xring Chip | Primary Purpose | Manufacturing Node | Status |
|---|---|---|---|
| Xring O1 | Smartphones, tablets and watches | Not specified in current report | In commercial devices |
| Xring O3 | Flagship smartphones/foldables | 3nm | Mass production |
| Xring O100 | Neural processing and AI | 6nm | Development completed |
| Xring D100 | Autonomous driving | 3nm | Development completed |
Xiaomi has also announced the Xring O100 and Xring D100, expanding its chip ambitions beyond smartphone processors.
TSMC Partnership Gives Xiaomi Access to Advanced Manufacturing
The partnership with TSMC is a crucial part of Xiaomi’s strategy. Designing a processor internally does not mean a company has to manufacture it itself. Advanced chip production requires extremely expensive fabrication facilities, sophisticated equipment and access to cutting-edge semiconductor processes.
TSMC is one of the world’s leading contract chip manufacturers, making it a critical production partner for companies developing advanced processors without owning their own leading-edge fabrication plants.
The reported use of TSMC’s 3nm process for the Xring O3 gives Xiaomi access to advanced manufacturing capabilities while allowing it to retain control over the chip’s design.
Three New Chips Expand Xiaomi’s Semiconductor Ambitions
Xiaomi’s semiconductor plans extend beyond its smartphone business. The company said the Xring O100 is a 6nm neural processing unit designed to support its MiMo large language model on consumer electronics.
The company also has the Xring D100, a 3nm processor intended for autonomous-driving applications. Xiaomi expects both chips to enter commercial use in 2027.
XIAOMI'S CHIP ROADMAP
XIAOMI
│
┌────────────┼────────────┐
↓ ↓ ↓
Xring O3 Xring O100 Xring D100
│ │ │
Smartphones AI Autonomous
& Foldables Processing Driving
│ │ │
3nm 6nm 3nm
│ │ │
2026 2027 2027
The broader roadmap suggests Xiaomi is attempting to build an internal semiconductor portfolio rather than limiting its efforts to smartphone processors.
Xring O1 Has Passed 1 Million Device Shipments
Xiaomi’s first-generation Xring O1 provides an early indication of the scale of the company’s chip strategy. Xiaomi said during its recent earnings call that cumulative shipments of devices powered by the Xring O1 had exceeded 1 million units.
Those shipments include smartphones, tablets and watches. However, the number of smartphones using the processor remains much smaller. Sources estimated that Xiaomi had sold about 150,000 Xring O1-powered smartphones since the chip’s May 2025 launch.
| Xring O1 Milestone | Figure |
|---|---|
| Launch | May 2025 |
| Total devices powered by O1 | More than 1 million |
| Estimated O1-powered smartphones sold | About 150,000 |
| Devices covered | Smartphones, tablets and watches |
| New smartphone processor | Xring O3 |
The gap between total Xring-powered devices and smartphone sales indicates that Xiaomi is gradually expanding the use of its proprietary silicon across its broader hardware ecosystem.
Foldable Phones Become the First Major Test for Xring O3
The Xring O3 is expected to be used in Xiaomi’s upcoming flagship foldable smartphone, according to one source. The reported shipment target of 200,000 to 300,000 units would make the chip’s initial deployment relatively limited compared with Xiaomi’s overall smartphone volumes.
The foldable market is nevertheless strategically important. Premium foldable phones offer manufacturers an opportunity to compete in a segment where advanced hardware, software integration and differentiation are particularly important.
Huawei currently holds a strong position in China’s foldable smartphone market. It shipped around 1.6 million foldable phones in China during the second quarter, giving it a 68% market share, according to Smart Analytics Global. Honor held 13.7%, while Oppo had 8.5%.
| China Foldable Smartphone Market | Q2 2026 Share |
|---|---|
| Huawei | 68% |
| Honor | 13.7% |
| Oppo | 8.5% |
| Xiaomi | Not specified in the cited market data |
Xiaomi’s move into more advanced proprietary silicon could therefore support its attempt to strengthen its position in the premium and foldable segments.
Why Smartphone Makers Are Designing Their Own Chips
The shift toward proprietary processors is part of a broader transformation in the smartphone industry. Device makers increasingly want to control the components that determine performance, artificial intelligence capabilities and power efficiency.
Apple has built its own A-series processors for iPhones and M-series chips for Macs. Samsung develops Exynos processors, while Huawei has continued investing in its own semiconductor ecosystem. Xiaomi’s Xring programme represents another major Chinese smartphone maker moving toward greater vertical integration.
The benefits can include closer hardware-software optimization, greater product differentiation and potentially reduced dependence on external suppliers. However, designing advanced processors also requires substantial research and development investment and access to sophisticated manufacturing capacity.
Xiaomi Faces a Difficult Smartphone Market
Xiaomi is expanding its chip ambitions at a challenging time for the global smartphone industry. Smartphone manufacturers are dealing with weaker device demand and higher component costs, particularly as memory prices put pressure on product economics.
Xiaomi sold approximately 65 million smartphones during the first half of 2026, compared with 84 million in the same period of 2025 and 83 million in the first half of 2024, according to Visible Alpha data cited by the report.
At the same time, Xiaomi’s average selling price increased, reaching 1,329 yuan in the first half of 2026 from 1,141 yuan in the same period of 2025.
XIAOMI SMARTPHONE SALES
H1 2024 █████████████████████████████████████████ 83M
H1 2025 ██████████████████████████████████████████ 84M
H1 2026 █████████████████████████████ 65M
Average Selling Price
H1 2024 1,123 yuan
H1 2025 1,141 yuan
H1 2026 1,329 yuan
The figures show a decline in unit shipments even as Xiaomi’s average selling price has risen. That makes premium products and differentiated technology increasingly important to the company’s growth strategy.
What the Xring Strategy Means for Qualcomm and MediaTek
Xiaomi’s greater use of proprietary processors could gradually reduce the share of devices powered by chips from Qualcomm and MediaTek, although the immediate impact is likely to remain limited.
The Xring O3’s reported initial deployment of 200,000 to 300,000 units is small relative to Xiaomi’s overall smartphone volumes. The more important question is whether Xiaomi can successfully scale its proprietary chips across a larger share of its flagship and premium devices.
If the strategy succeeds, Xiaomi could gain greater bargaining power when sourcing external processors and become less dependent on the product roadmaps of third-party chipmakers.
The Bigger Picture
Xiaomi’s Xring O3 launch is about more than a new smartphone processor. It reflects the growing importance of semiconductor control to major consumer-electronics companies. By designing its own chips while using TSMC for advanced manufacturing, Xiaomi can pursue greater hardware-software integration without having to build its own leading-edge fabrication infrastructure.
The move also highlights the increasing convergence of smartphones, artificial intelligence and autonomous driving. With the Xring O100 and D100, Xiaomi is building a broader semiconductor roadmap that could eventually support AI-enabled consumer devices and vehicles. The success of this strategy will depend on Xiaomi’s ability to turn proprietary chip development into commercially competitive products at scale.
Looking Ahead
The immediate test for the Xring O3 will be its deployment in Xiaomi’s next generation of premium and foldable devices. The reported 200,000-to-300,000-unit target represents an initial step rather than a mass-market rollout, but a successful launch could give Xiaomi a stronger foundation for expanding its proprietary silicon to more products.
Over the longer term, Xiaomi’s progress with the Xring O100 and Xring D100 will determine whether its semiconductor strategy can extend meaningfully beyond smartphones. If the company can scale its chips across phones, AI devices and autonomous-driving systems, Xiaomi could become a more vertically integrated technology company and reduce its dependence on external processor suppliers.
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