Xiaomi Launches Xring O3 Chip With TSMC
Xiaomi has unveiled its latest in-house smartphone processor, the Xring O3. The move strengthens the company’s effort to control key components and reduce reliance on external chip suppliers.
According to two people familiar with the matter, TSMC will manufacture the chip using its 3-nanometre process. One source said Xiaomi expects the processor to power an upcoming flagship foldable phone.
The reported shipment target stands at 200,000 to 300,000 units. However, Xiaomi and TSMC did not immediately comment on the manufacturing arrangement and shipment plans.
Xring O3 Expands Xiaomi’s Chip Strategy
The Xring O3 follows Xiaomi’s first proprietary smartphone processor, the Xring O1. Therefore, the new chip marks another step in Xiaomi’s effort to build greater control over its semiconductor technology.
The strategy also reflects a wider shift among major device manufacturers. Apple, Samsung Electronics and Huawei have developed their own processors to differentiate products and strengthen supply-chain resilience. Meanwhile, Xiaomi continues to reduce its dependence on suppliers such as Qualcomm and MediaTek.
A smartphone system-on-chip combines several functions within one component. These include computing, graphics, artificial intelligence processing and imaging. Consequently, greater control over the processor can influence both hardware design and product features.
Xiaomi has already expanded the use of its Xring O1 beyond smartphones. The company said cumulative shipments of devices using the processor had exceeded 1 million units. These products include smartphones, tablets and watches.
However, estimates suggest Xiaomi had sold about 150,000 Xring O1-powered smartphones since its May 2025 launch. That figure suggests the company is still building consumer adoption for its proprietary silicon.
The Xring O3 now takes that strategy into a more advanced manufacturing generation. Its reported 3-nanometre production process should also give Xiaomi access to newer semiconductor technology for premium devices.
Xiaomi Expands Chips Into AI and Cars
Xiaomi is developing more than smartphone processors. The company has also contracted TSMC to manufacture two additional Xring chips.
The first is the Xring O100, a 6-nanometre neural processing unit designed to support Xiaomi’s MiMo large language model across consumer electronics. The second is the Xring D100, a 3-nanometre processor intended for autonomous-driving applications.
Furthermore, Xiaomi said the O3 has entered mass production. Meanwhile, the O100 and D100 have completed development and should enter deployment next year.
This broader portfolio connects Xiaomi’s semiconductor strategy with its expanding technology ecosystem. In particular, dedicated silicon could help the company optimise AI workloads across devices while supporting its ambitions in connected products and electric vehicles.
Xiaomi has invested more than 20 billion yuan in chip development and expanded its semiconductor team to more than 3,000 employees. Therefore, the company is committing substantial resources to reduce its dependence on external chip technology.
The move also comes as Xiaomi expands into higher-priced smartphone segments. Its reported foldable-phone plans could put the company into closer competition with Huawei, which held a strong position in China’s foldable market during the second quarter.
Chip Independence Meets Rising Component Costs
Xiaomi’s semiconductor push comes during a difficult period for the global smartphone industry. Global handset shipments are expected to decline 14% in 2026, according to IDC data.
At the same time, memory and component costs are pushing smartphone prices higher. Xiaomi sold 65 million handsets during the first half of 2026, compared with 84 million during the same period in 2025.
However, Xiaomi’s average selling price increased to 1,329 yuan from 1,141 yuan a year earlier. That shift indicates stronger exposure to premium devices even as overall unit sales decline.
Consequently, proprietary processors could become increasingly important to Xiaomi’s premium strategy. Greater control over silicon can help the company coordinate hardware, software and AI capabilities across its product range.
The Xring programme also gives Xiaomi another route toward supply-chain resilience. Yet, developing competitive chips requires sustained investment, advanced manufacturing access and strong software optimisation.
For now, the Xring O3 represents Xiaomi’s most visible step in that direction. Its reported partnership with TSMC gives the company access to advanced manufacturing, while the broader O100 and D100 programme extends its chip ambitions into AI and autonomous driving.
Ultimately, Xiaomi is moving from a device maker that largely depended on external silicon toward a company building a wider proprietary computing stack. The success of that strategy will depend on adoption, performance and the company’s ability to turn chip investment into differentiated products.
