Xiaomi's Next Chip: Why Sticking to 3nm Might Be a Smart Move

Xiaomi is developing a new chip, the XRING 02, set to launch in 2026. Unlike competitors, Xiaomi is not adopting the latest 2nm technology, instead opting for TSMC's 3nm process. This decision, while seemingly a step back, is driven by strategic considerations.

Cost Efficiency

• 2nm process is expensive, with each wafer costing around $30,000 before testing.
• 3nm process allows Xiaomi to save significantly on production costs.

Technological Constraints

• U.S. export controls limit Chinese companies' access to advanced chip-making tools.
• Without these tools, developing a 2nm chip is nearly impossible for Xiaomi.

Versatility and Market Expansion

• The XRING 02 will be used in smartphones, tablets, cars, and other devices.
• Developing a multi-purpose chip requires time and resources, possibly delaying its release.

Strategic Independence

• By focusing on 3nm, Xiaomi reduces dependency on Qualcomm and MediaTek.
• This move gives Xiaomi greater control over its products and technology.

Conclusion

Xiaomi's decision to stick with 3nm is a strategic business move. It allows them to cut costs, overcome technical barriers, and explore new markets, ensuring long-term growth.