Xiaomi has always been one of the most fruitful partners of Qualcomm but also of MediaTek. The first made sure that Lei Jun's brand was the first to launch certain smartphones with its processors: think of the Mi 10 and the Mi 11 which were the first to come out with Snapdragon 865 and 888 respectively; as regards the second company, in the last year relations have intensified and this can be seen with the new smartphones with Dimensity and Helio processors. But things will change soon as the Chinese giant is investing dizzying amounts in the processor sector.
Xiaomi invests in companies, startups and partnerships in the processor sector: the long-term goal is not just to become independent
Clearly we are talking about a long-term goal because the results will begin to be seen only years after the investments. In any case Xiaomi has invested, as of 2019, in at least 34 Chinese chip-related companies as an analysis of the company's data shows Nikkei Asia. In addition to these investments (we are talking about purchases), the Chinese giant added equity investments in 25 other hardware companies. The objectives we were talking about earlier are: self-development of microchips and independence from other companies, especially US ones.
Despite the good blood that flows (I would say excellent) between Xiaomi and Qualcomm, theBeijing's goal always remains the same: to become independent from the United States. Inevitably in a country like China, all companies have to follow the guideline and maybe that's a good thing. We are not analysts but probably if the major companies detach themselves from the usual producers, the chip crisis could see one positive decline. Let's think, for example, if Xiaomi divided its way from the US giant producer of Snapdragon: a large quantity of products would be missing from the second company, and the first would find itself developing its own.
A division of tasks, albeit on a very large scale. But let's go back to the Nikkei data. Investments in chips and other hardware have been made primarily through aaffiliate known as Hubei Xiaomi Changjiang Industry Fund Partnership, established in 2017. Until today this subsidiary has remained on the sidelines, acquiring other companies and startups but without producing. However, Xiaomi claims its chip development ambitions, which began in 2014, are starting to pay off. On Tuesday, it unveiled an in-house designed ISP chip, the C1 appears.
But when did this tremendous race for chip independence start? Mainly since Washington abruptly cut Huawei from its main global suppliers. And let's remember that the old Trump administration did more or less the same thing with Xiaomi, albeit in vain. But regardless of this, is it true that it is convenient for companies to develop their own chips?
Donnie Teng, analyst at Nomura Securities Nikkei Asia, said: “It's not realistic that any company can do all the things and only use self-developed chips…that would consume too many resources. At the same time it would be too risky to put all your eggs in one basket considering the geopolitical tensions“. This is true, but remember that Xiaomi has invested in several companies, keeping them somewhat independent. For example he invested in Cvitek, an AI chip developer focusing on video monitoring and edge computing technology; or Xi'an Intelligence Silicon Technology, which develops programmable gate arrays.
But what do you think? Will Xiaomi ever become an independent company from others, especially from Qualcomm? And if that happened, it really would be positive for the brand? It's really not easy to develop processors (speaking of smartphones) that are equivalent to those of Qualcomm. And let's also assume that Xiaomi is not just a smartphone company ...
