The introduction of the Xring O3 chip comes a year after Xiaomi launched its first proprietary smartphone processor, the Xring O1, the latest step in Xiaomi's effort to join rivals such as Apple, Samsung Electronics and Huawei in developing chips used in their products.
Two people familiar with the matter told Reuters that Taiwanese company TSMC will manufacture the new chip using its 3-nanometre production technology.
One of the people familiar with the matter said the chip is expected to be used in Xiaomi's upcoming flagship foldable phone, with production targeted at 200,000 to 300,000 units.
Xiaomi's expansion into foldable phones, which make up a more expensive segment of the smartphone market, could challenge Huawei, the leading domestic player.
According to research firm Smart Analytics Global, Huawei shipped 1.6 million foldable phones in China in the second quarter, taking a 68% market share, followed by Honor with 13.7% and Oppo with 8.5%.
Smartphone processors, or systems on a chip (SoCs), integrate computing, graphics, AI processing and imaging functions into a single component.
Device makers seek in-house chips
Xiaomi's effort to design and produce chips reflects a broader industry trend, as device makers, amid intensifying competition in the high-end smartphone segment, seek to differentiate products and reduce dependence on suppliers such as Qualcomm and MediaTek.
Last week Xiaomi said at a briefing that total sales of devices equipped with the Xring O1 chip, including smartphones, tablets and watches, have exceeded one million units since its launch.
According to people familiar with the matter, since the launch of the Xring O1 chip in May 2025, Xiaomi has sold about 150,000 smartphones based on the Xring O1 chip.
Memory costs push up prices
Smartphone makers are grappling with a global sales slump as memory and component costs have increased prices and reduced demand.
According to data from Visible Alpha, Xiaomi sold 65 million phones in the first half of this year at an average price of 1,329 yuan ($197.74), while in the same period last year it sold 84 million devices at an average price of 1,141 yuan and in 2024 sold 83 million devices at 1,123 yuan.
According to research firm International Data Corporation, global smartphone shipments are expected to decline by 14% this year.
According to Reuters, Xiaomi said on Monday it has also contracted with TSMC to produce two other Xring chips. / ISNA