Xiaomi

Full briefing

Xiaomi Corporation (HKEX: 1810) is headquartered in Beijing and was founded in 2010 by Lei Jun and six co-founders with a business model that inverted the conventional electronics OEM approach — selling hardware at or near cost and monetizing through software, internet services, and ecosystem products. By 2023, Xiaomi had shipped over 170 million smartphones annually and overtaken Apple to become the world's #3 smartphone maker by unit volume (behind Samsung and Apple), while simultaneously becoming China's #1 domestic smartphone brand, displacing OPPO and Vivo. Xiaomi's chip sourcing reflects the dual-tier structure of the global mobile SoC market. Premium flagships — the Xiaomi 14, 14 Pro, and 14 Ultra released in late 2023 and early 2024 — use Qualcomm Snapdragon 8 Gen 3, which is fabbed by TSMC on a 4nm process and includes a Hexagon NPU with 45 TOPS AI performance. Mid-range devices in the Redmi Note and Poco series predominantly use MediaTek Dimensity SoCs, fabbed by TSMC. This dual-supplier approach insulates Xiaomi from single-vendor supply shocks and gives it negotiating leverage with both Qualcomm and MediaTek on pricing — a meaningful advantage given Xiaomi's historically thin hardware margins. Xiaomi has pursued in-house chip design through its Surge S series since 2017, when the Surge S1 SoC was announced as a direct competitor to Kirin (Huawei) and MediaTek. The Surge S1 was fabricated on TSMC's 28nm process; however, the project encountered yield and performance challenges, and subsequent Surge S chips pivoted toward coprocessors rather than main SoCs. The Surge S2 (never publicly released) was shelved, and Xiaomi's next announced chip was the Surge C1 (ISP-focused coprocessor, 2021) and Surge G1 (battery management chip, 2022). In 2023, Xiaomi announced it would develop another main SoC with TSMC — reportedly targeting TSMC's 3nm process for a future flagship. This in-house chip ambition has been consistently more modest in execution than Huawei's Kirin or Apple's A-series programs, partly due to resource constraints and partly due to the broader geopolitical caution around Chinese companies accessing advanced foundry capacity. Xiaomi 14 AI features represent the consumer-facing manifestation of its AI investment. Running on HyperOS (released in November 2023 as a replacement for MIUI), the Xiaomi 14 series supports AI Photo, AI Writing, AI Translation, and Circle to Search (via Google integration), all powered by the Snapdragon 8 Gen 3's Hexagon NPU and a combination of on-device and Xiaomi cloud inference. Xiaomi has also invested in AI-native features for its broader IoT ecosystem — smart home devices, robots (Xiaomi CyberDog), and automotive (Xiaomi SU7 electric vehicle, launched March 2024) — creating AI inference workloads across a broader product portfolio than pure smartphone OEMs. Xiaomi's expansion into electric vehicles with the SU7 — which shipped approximately 135,000 units in 2024 and targets 300,000 units in 2025 — is the most significant supply chain development beyond smartphones. The SU7 uses NVIDIA Drive Orin SoC for autonomous driving compute (the same chip used by NIO, Li Auto, and other Chinese EVs), CATL batteries, and a custom-developed AI driving system called Xiaomi Pilot. This vehicle program makes Xiaomi a customer of NVIDIA's automotive chip division and expands its supply chain footprint into automotive-grade silicon, power semiconductors, and LIDAR — creating supply chain dependencies well beyond the mobile chip vendors that historically defined Xiaomi's hardware sourcing.