XIAOMI(HK:01810) Canalys·2025-05-21 03:38Core Viewpoint - Xiaomi has made significant strides in chip development, recently launching its flagship SoC chip, the Xuanjie O1, which utilizes advanced 3nm process technology and is comparable to current flagship chips in the market [1][12]. Group 1: Chip Development Journey - Xiaomi introduced its first self-developed 4G SoC chip, the Surge S1, in 2017, but faced market challenges that hindered further iterations [1]. - Since 2021, Xiaomi has commercialized several self-developed small chips for various functions, gaining valuable practical experience for future chip development [1]. - The recent launch of the Xuanjie O1 marks Xiaomi as the second Chinese manufacturer, after Huawei, to achieve mass production and commercialization of a flagship SoC chip [1]. Group 2: Strategic Value of Chip R&D - Xiaomi's continuous investment in chip R&D aims to create a complete ecosystem that integrates hardware and software across various devices, including smartphones, tablets, and IoT products [5]. - The company faces significant challenges in developing its baseband chips, including high patent concentration among leading firms and the need for extensive global compatibility [5][6]. - By focusing on self-developed application processors (AP) paired with third-party baseband chips, Xiaomi is pursuing a practical and effective development path for its SoC [2]. Group 3: Supply Chain and Market Position - Xiaomi's smartphone SoC supply chain is diversified, with MediaTek being the dominant supplier, accounting for 63% of the SoC chips used in Xiaomi smartphones [8]. - Qualcomm follows as the second-largest supplier, providing 35% of the SoC chips, primarily for mid-to-high-end models [8]. - The Xuanjie O1 chip will initially be used in the Xiaomi S15 Pro and Xiaomi Pad 7 Ultra, with a conservative planned shipment volume in the tens of thousands due to initial high costs [12]. Group 4: Competitive Landscape - The Xuanjie O1 chip features a high-frequency super-large core architecture and has surpassed some current flagship chips in benchmark tests [12]. - Xiaomi's strategy to maintain close cooperation with third-party chip suppliers remains crucial, as the new self-developed chips are unlikely to disrupt existing supply relationships in the short term [13].