Why Does Xiaomi Need Its Own SoC?

Xiaomi's investment in a company that designs integrated circuits may mean that the maker of smartphones Mi and Redmi is looking for a way to become independent of Qualcomm. Xiaomi announced a new investment, which aims to develop its own SoC systems, which will be used in smart phones and other devices. The manufacturer bought a 6 percent stake in VeriSilicon Holdings Co Ltd. It is a Chinese technology company from Shanghai specializing in the design of integrated circuits. Xiaomi becomes the second largest external investor in VeriSilicon. The first, which is difficult to compete with, is the government's Chinese Investment Fund for Integrated Circuits, which is part of a large state investment plan in the layout design industry.

Not much is known about VeriSilicon itself, except that the company is based in Shanghai and employs approximately 700 employees in five R & D locations in the US and China. VeriSilicon acts as a contractor for other semiconductor companies and it is possible that it has accumulated sufficient experience and knowledge to start creating its own SoC.

Previous attempts to create your own layout

Xiaomi has long been interested in creating its own processors, in particular, modern SoC. To this end, in 2014, a branch dealing with the design of semiconductors was established. In 2017, the company released its first layout, named Surge S1. He only found himself in the Xiaomi Mi 5C, a smartphone that did not even gain popularity in China. Since then, Xiaomi relied mainly on Qualcomm Snapdragon systems. Unfortunately, events from the first half of this year probably gave the Chinese company to think.

Why does Xiaomi need its own SoC?

The dependence of the manufacturer on US SoC suppliers could literally "kill" almost all of the company's production. Political tensions between China and the US, although resulting in attacks targeting mainly Huawei and ZTE. Xiaomi is not so clearly in the sights of the US administration, because it does not build 5G network infrastructures. This does not mean, however, that he cannot get "legislative backfire". Being one of the largest smartphone manufacturers in the world, the Chinese company must look for methods to become independent of Qualcomm.

It is worth noting that among the top five smartphone manufacturers, the three largest ones (Samsung, Huawei, Apple) are also producers of SoC systems. Xiaomi is right behind the podium. It is not difficult to guess that the Chinese company has the ambition to one day reach for the third position. For this purpose, it would have to overtake Apple, so the producer, on which it has been repeatedly modeled.