Last month, at Xiaomi's 15th anniversary new product launch conference, founder Lei Jun officially announced that Xiaomi's self-developed Xuanjie chip had completed the leap from 0 to 1, and was equipped with three new flagship products - Xiaomi 15S Pro, Xiaomi Tablet 7 Ultra, and Xiaomi Watch S4, and has begun large-scale mass production.

At the press conference, Lei Jun said: Xiaomi's chips should be comparable to Apple. Xuanjie O1 Antutu running score exceeds 3 million, integrated 19 billion transistors, second-generation 3nm process + ten-core four-cluster CPU number... "The performance is infinitely close to Apple, and the cost is 35% lower than Apple." However, Xiaomi's chip manufacturing is not a whim. As Lei Jun said, Xiaomi's chip manufacturing began in September 2014, and ten years have passed in a blink of an eye. Looking back at Xiaomi's ten-year chip manufacturing journey, in addition to continuing to develop its own chips, it is inseparable from a large number of chip semiconductor-related investment layouts. Which chip semiconductor companies has Xiaomi invested in over the years? Why can Xiaomi make chips? In this issue of Weird Things, let's take a look at the investment landscape behind Xiaomi's chip manufacturing.

1 110 sales in 8 years, opening up the "core" speed

Xiaomi entered the chip semiconductor investment field three years later than R&D.

Xiaomi started chip R&D as early as 11 years ago. In September 2014, the Pengpai project was approved. In October, Xiaomi established a wholly-owned subsidiary, Beijing Songguo Electronics, and officially entered the field of mobile phone chip R&D.

In February 2017, Xiaomi's first self-developed mobile phone chip "Pengpai S1" was officially unveiled. However, after "Pengpai S1", Xiaomi was rumored to have failed to tape out "Pengpai S2". It was also in this year that Xiaomi invested in its first chip semiconductor company, Yuguang Technology.

It can be said that Xiaomi's entry into the chip field and the obstacles encountered in self-developed chips are inseparable. After that, Xiaomi began to lay out its own chip investment map.

Tianyancha public information shows that as of now (May 23, 2025), Xiaomi has invested in a total of 110 chip semiconductor projects.

In the three years from 2017 to 2019, Xiaomi only participated in 10 chip semiconductor investments. It seems like a novice "testing the waters", but in fact, two of them were invested exclusively by Xiaomi. According to the disclosed information, Xiaomi spent 100 million yuan on the A+ round of Yiwei Semiconductor alone.

2 Chip investment

Speaking of chip investment, we have to mention another "comrade" of Xiaomi - Huawei.

In May 2019, the United States announced the "Entity List". In order to cope with the risks, Huawei established Habour Investment, which mainly invested in "neck" fields such as semiconductor chips

and materials.

Against the background of US sanctions, domestic investment in chip semiconductors and other related companies has reached a climax. Xiaomi is not to be outdone. Since 2020, the pace of investment has accelerated significantly. This year, it has participated in 23 investments, more than twice the number of the previous three years.

In the three years from 2020 to 2022, Xiaomi has made a total of 84 investments in the field of chips and semiconductors. The number of investments reached a peak in 2021, with a total of 35 investments, 6 more than Huawei Habour in the same period.

However, after 2021, the number of Xiaomi investments began to decline significantly. In 2022, there were 26 investments, a year-on-year decrease of 26%; in 2023, there were 10 investments, a year-on-year decrease of 62%; in 2024, there were 4 investments, a year-on-year decrease of 60%.

From the comparison with Habour Investment, it can be seen that Xiaomi's investment strategy is basically consistent with the development trend of market investment, and is also related to the adjustment of Xiaomi's investment strategy.

On the one hand, after three years of intensive investment, Xiaomi has gradually improved its ecological layout in the fields of chips and semiconductors; on the other hand, Xiaomi has begun to shift its investment focus to the downstream fields of chips, such as artificial intelligence and autonomous driving.

Compared with Huawei, whose investment subjects in the field of chips and semiconductors are relatively simple, Xiaomi's investment subjects are as many as a dozen, including not only Xiaomi Group and its investment institutions such as Hanxing Venture Capital, Xiaomi Industrial Investment, Shunwei Capital, but also private equity funds such as Xiaomi Changjiang Industrial Fund.

Among them, Xiaomi Changjiang Industrial Fund is the main force of Xiaomi's investment in chips. As of now (May 23, 2023), a total of 93 deals have been made, of which 54 are related to chips and semiconductors, accounting for nearly 60%.

As for Shunwei Capital, which has a closer relationship with Lei Jun himself, it has invested in 23 chip and semiconductor projects. Although the number is not small, Shunwei Capital has made a total of 529 external investments since its establishment in 2011, and chip and semiconductor projects account for less than 5%. Obviously, Shunwei Capital's investment in chips and semiconductors may be more of a financial and industry layout consideration, rather than a strategic layout.

3 Invest in what you build

Xiaomi's investment logic can be summarized in one sentence: invest in what you make.

At present, Xiaomi's investment in the field of chips and semiconductors mainly revolves around its core products, and most of the main products of the invested companies can become part of Xiaomi's own supply chain.

For example, in 2021-2022, Xiaomi released its self-developed Pengpai P1 charging management chip and Pengpai G1 battery management chip, and formed the "Xiaomi Pengpai Battery Management System". In the past two years, Xiaomi has invested in power management chip companies such as Nanxin Technology and Huayuan Zhixin.

In addition to investing in companies that produce similar products, Xiaomi is best at sweeping the entire industrial chain and hitting the upper, middle and lower reaches. Among them, the midstream companies of chip semiconductors are Xiaomi's main investment targets, with a total of 88 investments, accounting for 80%.

Taking automotive chips as an example, Xiaomi not only invested in companies in the middle of the industrial chain whose main products are battery management chips and automotive-grade chips, but also invested in upstream companies such as Zhanxin Electronics and Linzhong Electronics whose main products are silicon carbide power modules and semiconductor devices, as well as downstream companies related to autonomous driving and automotive electronics.

Under the investment logic of "invest in what you make", Xiaomi's investment in chips and semiconductors also has its own rules and characteristics.

First, from the perspective of investment rounds, Xiaomi's investment in chips and semiconductors focuses on early layout. Among the 110 investment events, there was 1 seed round, 15 angel rounds and 37 A rounds. There were 53 investment events in and before the A round, accounting for 48%.

It is precisely because of their early entry that these new science and technology companies have brought huge profits to Xiaomi. For example, Xiaomi participated in the A and C rounds of financing of Nanxin Technology twice in 2018 and 2020. Nanxin Technology will be listed on the Science and Technology Innovation Board in 2023 with a market value of over 30 billion yuan. Although the specific amount of income has not been disclosed publicly, compared with the tens of millions of yuan in the total amount of A round financing, Xiaomi has made a lot of money.

Second, from the perspective of investment areas, Xiaomi's investment covers a wide range and will not repeat multiple investments in one field. In terms of chips, in addition to the familiar analog chips, RF chips, wireless communication chips and other market segments, Xiaomi has begun to try to expand its territory to new channels such as RISC-V architecture and ASIC chips. Semiconductors, as a key area of layout, involve areas including third-generation semiconductors, semiconductor core materials, EDA tools, etc.

About Xiaomi

After ten years of self-research and eight years of investment, Xiaomi has a first-mover advantage in chip manufacturing.

However, it may be too early to celebrate success. What really makes chip manufacturing "nine deaths and one life" is the huge capital investment. To design a high-end mobile phone SoC chip, the early research and development will burn billions of yuan, and every tape-out failure will result in a loss of hundreds of millions. Not to mention the subsequent iterations.

Xiaomi made Xuan Ring, investing 13.5 billion in four years. Five years ago, Lei Jun had set a plan of "investing 100 billion yuan in research and development within five years". Last night, Lei Jun set a new plan for the next five years: from 2026 to 2030, Xiaomi's R&D investment is expected to reach 200 billion yuan.

200 billion yuan is not something Lei Jun "just said". Looking through the account books, Xiaomi has the strength to do so.

On the one hand, the latest data from IDC shows that Xiaomi's smartphone shipments in the first quarter of 2025 increased by 40% year-on-year, ranking first in the Chinese market. On the other hand, the losses in car manufacturing are narrowing, and the IoT (Internet of Things) ecological chain covers large appliances, smart homes and other fields, forming a high-gross-profit product matrix. The continuous blood-making of the main business has undoubtedly saved a lot of money for Xiaomi.

Xiaomi's 2024 financial report shows that as of December 31, 2024, Xiaomi Group has a total cash resource of RMB 175.1 billion. Among them, cash and cash equivalents are RMB 33.66 billion. With such a large cash reserve, coupled with the support of multiple business lines, restarting chip manufacturing at this time is not so much a risky move of "nine deaths and one life", but rather a necessity of "right time, right place and right people".

Lei Jun once again answered the question "Why make chips" at the press conference last night, saying: "To become a great hardcore technology company, chips are the peak that must be climbed."

Why must we climb?

First, it is for high-end development.

With Apple and Samsung in front and Huawei in the back, Xiaomi's chip manufacturing is the inevitable way to try to make its products high-end - only with real hard-core technological content can high-priced products be sold. The Xiaomi 15S Pro equipped with Xuanjie O1 is priced at 5,499 yuan, directly pointing to the high-end price of Apple and Huawei.

Secondly, it is necessary to truly create a "full ecosystem of people, cars and homes". Referring to Huawei's Kirin chip, it not only supports Huawei's Hongmeng system to conquer the world, but also truly supports the "full ecosystem of people, cars and homes". The latter is a group strategy that Xiaomi has actively mentioned since 2023, but Huawei is the better practitioner at present. In addition, Huawei's previous experience of being caught in a geopolitical dilemma has made it more important for Xiaomi to develop its own chips and hold the core in its own hands.

Today, Xuanjie O1 has begun large-scale mass production, and three new products equipped with self-developed Xuanjie chips have been collectively unveiled. As Lei Jun himself said, chips must have a large enough market demand and be sold to support the high cost of chip research and development. Xiaomi's test is still to come.

Reference: Xiaomi has invested in more than 100 semiconductor companies in 5 years, Lei Jun builds "chips" to catch up with Apple | Silicon World Titanium Media