Xiaomi is making another major push into the high-end smartphone chip market, unveiling its new Xring O3 processor as the Chinese technology giant looks to gain greater control over one of the most critical components inside its devices.
The move marks the latest chapter in Xiaomi’s effort to reduce its reliance on outside chip suppliers such as Qualcomm and MediaTek. According to Reuters, people familiar with the matter said the new Xring O3 will be manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC) using its advanced 3-nanometre process.
The announcement comes roughly a year after Xiaomi introduced its first proprietary smartphone processor, the Xring O1, putting the company among a growing group of major smartphone manufacturers—including Apple, Samsung and Huawei—that are developing custom silicon to gain tighter control over device performance and hardware integration.
Xring O3 could power Xiaomi’s next flagship foldable
The new processor is expected to play an important role in Xiaomi’s next generation of premium devices.
Two people familiar with the plans told Reuters that the Xring O3 is expected to power an upcoming flagship foldable smartphone, with a projected shipment target of between 200,000 and 300,000 units. However, those figures remain source-based rather than officially confirmed.
Xiaomi and TSMC had not immediately responded to requests for comment regarding the chip’s manufacturer, production technology or shipment target, Reuters reported.
That distinction matters: while the Xring O3 announcement is official, some of the most specific details surrounding its manufacturing and first major device remain based on people familiar with Xiaomi’s plans.
Why TSMC’s 3nm technology matters
The reported use of TSMC’s 3nm manufacturing technology places Xiaomi’s new chip in an extremely advanced segment of the smartphone semiconductor industry.
Xiaomi’s previous Xring O1 was also built using TSMC’s 3nm technology. Xiaomi said in its own technical material that the O1 features 19 billion transistors, a 10-core CPU and a 16-core Immortalis-G925 GPU.
Reuters reported in 2025 that Xiaomi had invested about 13.5 billion yuan (then roughly US$1.87 billion) in developing the Xring O1 and planned to invest at least another 50 billion yuan in chip design over at least a decade.
That investment shows that Xiaomi’s chip ambitions are not simply a short-term experiment. The company has been building its semiconductor capabilities for years, after an earlier attempt at developing mobile processors was scaled back because of high costs.
Xring O1 gives Xiaomi a starting point
The Xring O3 follows the Xring O1, which debuted in 2025 in devices including the Xiaomi 15S Pro and Xiaomi Pad 7 Ultra. Reuters reported at the time that Xiaomi had begun mass production of the O1 ahead of those product launches.
Xiaomi said during an earnings call last week that cumulative shipments of devices powered by the Xring O1—including smartphones, tablets and watches—had exceeded 1 million units.
Reuters sources, however, estimated that only about 150,000 smartphones using the O1 had been sold since its May 2025 launch.
The numbers illustrate both the progress and the challenge facing Xiaomi: the company has successfully put proprietary silicon into commercial products, but expanding those chips across its flagship smartphone business will require significant investment and manufacturing capacity.
Xiaomi is joining a bigger custom-chip race
The strategy mirrors a broader shift in the smartphone industry.
Apple has long designed its own processors for the iPhone and other products, while Samsung develops its Exynos chips and Huawei has pursued its own semiconductor ecosystem. For smartphone makers, proprietary silicon can provide greater control over performance, power efficiency, imaging, artificial intelligence and how hardware interacts with software.
The approach can also reduce dependence on external suppliers and give manufacturers more flexibility when designing premium devices.
Reuters described Xiaomi’s move as part of this broader industry trend as competition in the high-end smartphone market intensifies.
But Xiaomi still depends on the global semiconductor supply chain
There is an important twist to Xiaomi’s chip strategy.
Although the Xring processors are designed by Xiaomi, reported production of the O3 will rely on TSMC, one of the world’s leading semiconductor foundries.
That means Xiaomi is gaining greater control over chip design and product integration without becoming fully independent of overseas semiconductor manufacturing.
The distinction is especially significant given the geopolitical competition surrounding advanced semiconductor technology and China’s efforts to strengthen domestic technological capabilities.
What comes next?
The biggest test for Xiaomi will not simply be whether it can design another sophisticated processor.
It will be whether the company can scale proprietary silicon across more smartphones and devices while maintaining competitive performance, efficiency, cost and supply.
The Xring O3 therefore represents more than another smartphone component. It is a test of whether Xiaomi can gradually build the kind of vertically integrated technology ecosystem that has helped companies such as Apple differentiate their premium hardware.
For now, the immediate spotlight is on Xiaomi’s upcoming flagship foldable and whether the reported 200,000–300,000-unit target becomes reality.
If Xiaomi succeeds, the Xring O3 could become an important step in the company’s attempt to control more of the technology inside its most expensive devices—and potentially make the battle with Qualcomm and MediaTek even more intense.
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