Investment Rating - The industry investment rating is "Positive" [2] Core Viewpoints - The report highlights that the semiconductor industry is experiencing a downturn, with various segments showing negative year-to-date performance, particularly consumer electronics which has declined by 11.12% [2][8] - Xiaomi has launched its first self-developed flagship processor "Xuanjie O1," which utilizes a second-generation 3nm process, featuring a 10-core CPU and a 16-core GPU, with a transistor count of 19 billion and a chip area of 109mm² [2][29][30] - The report emphasizes Xiaomi's significant investment in chip development, with over 13.5 billion yuan invested to date and an expected investment of over 6 billion yuan this year, as part of a long-term plan to invest at least 50 billion yuan over the next decade [31] - The introduction of the Xuanjie O1 positions Xiaomi as the fourth company globally to mass-produce 3nm SoC chips, indicating a shift in the global mobile SoC chip landscape and enhancing the competitiveness of domestic SoC chips [31] Summary by Sections Industry Performance - The report notes a decline in the Shenwan Electronics Index, with specific segments like semiconductors down by 0.66% year-to-date and consumer electronics down by 11.12% [2][8] - In the past week, major North American tech stocks also saw declines, with Apple down by 7.57% and Tesla down by 3.04% [2][11] Xiaomi's Processor Launch - Xiaomi's Xuanjie O1 processor features advanced architecture with two Arm Cortex-X925 super-large cores, four A725 performance cores, and two A520 ultra-efficient cores [30][31] - The report suggests that Xiaomi's entry into the 3nm SoC market could disrupt the existing market dynamics and enhance the global competitiveness of Chinese semiconductor firms [31] Investment Opportunities - The report recommends monitoring companies involved in computing power chains such as Industrial Fulian, Shennan Circuit, and others, as well as domestic computing power firms like Cambrian and Haiguang Information [2]

Core Viewpoint - Xiaomi's founder and CEO Lei Jun is shifting his focus from mobile phones to the automotive sector, indicating a significant strategic pivot for the company as it faces a trust crisis and seeks to reaffirm its market position [2][3][4]. Group 1: Leadership and Marketing Strategy - Lei Jun has stated that half of his energy will be dedicated to the automotive business, while only one-third will be allocated to mobile phones, highlighting a major shift in priorities [2]. - The recent product launch event on May 22 marks Xiaomi's 15th anniversary and is the first major event following a significant trust crisis, necessitating Lei Jun's return to the public eye to restore confidence [3]. - Lei Jun's personal branding is deeply intertwined with Xiaomi, making it difficult for him to abandon his previous marketing strategies despite recent controversies [3][4]. Group 2: Recent Challenges and Responses - Following a serious incident involving the Xiaomi SU7, Lei Jun reduced his social media presence, reflecting a period of introspection and strategic recalibration for the company [5][6]. - Xiaomi acknowledged issues with the SU7's carbon fiber hood, leading to customer complaints and a public apology, which indicates the company's responsiveness to consumer feedback [7]. - The legal department of Xiaomi reported the resolution of a network smear campaign against the company, which may help mitigate some of the negative publicity [8][10]. Group 3: Product Launch and Future Plans - During the recent product launch, Xiaomi announced a significant R&D investment plan, committing to 200 billion yuan over the next five years, emphasizing its focus on innovation and self-research [12]. - The new model, Xiaomi YU7, is positioned as a mid-to-large SUV, targeting a larger market segment compared to the previous SU7, which faced a more competitive environment [15]. - The launch event showcased Xiaomi's advancements in self-developed technology, including the mass production of its 3nm mobile processor, positioning the company as a key player in the tech industry [10][12].