Xiaomi's $28B R&D Plan: XRING Chips at the Core

Xiaomi is taking its in-house chip efforts more seriously and plans to embed them into a large-scale investment program. According to recent reports, over the next five years the company is expected to spend around 200 billion yuan (about $28 billion) on R&D. While the funds won't go exclusively to processors, the XRING series is set to be a cornerstone of Xiaomi's pursuit of technological independence.

The first concrete sign of these ambitions was the XRING 01. With shipments reaching one million units, its volume is still modest compared to Qualcomm and MediaTek, but for Xiaomi it's a starting point, not an end goal. Over the last five years, Xiaomi has already pumped 105.5 billion yuan ($14.77 billion) into cars, chips, large language models, home appliances, and other fields. These investments reportedly helped the company generate over $64 billion in revenue.

The next major step is expected to be the XRING 03. Xiaomi Group President Lu Weibing confirmed that a new generation of the proprietary chip will debut later this year. However, rumors suggest Xiaomi won't jump straight to TSMC's cutting-edge 2nm node; instead, it will opt for the more mature 3nm N3P process. While that might seem like playing catch-up, for Xiaomi it's a pragmatic choice: at this early stage, controlling cost, yield stability, and volume matters more than chasing the most expensive process.

The XRING 03 will likely use off-the-shelf ARM CPU and GPU designs rather than fully custom cores. This makes sense as a stepping stone: developing custom cores on par with Qualcomm's Oryon demands enormous investment, expertise, and time. Xiaomi can first refine the architecture, manufacturing, drivers, and smartphone optimization for its SoCs before moving toward deeper customization.

Xiaomi's core strategy isn't about immediately catching Qualcomm or MediaTek; it's about steadily reducing reliance on external suppliers. If Xiaomi keeps evolving the XRING line over multiple generations, its own chips could eventually power a wide ecosystem spanning smartphones, tablets, cars, smart home devices, and AI services.

For the industry, this is a telling signal. Xiaomi has long outgrown its reputation as a budget smartphone maker and is increasingly becoming a technology company with its own hardware, software, and infrastructure. The $28 billion commitment underscores that the XRING push is no mere vanity project—it's a long-term bid to join the ranks of companies that control their own critical components.