A major milestone for Xiaomi revolves around announcing its custom 3nm chipset for smartphones and tablets sometime in 2025, marking the first time that a company of Chinese origin would proceed to unveil an in-house solution, and that too, using cutting-edge lithography. However, as you would expect, this undertaking is said to arrive with more than a few challenges, which can become overwhelming for Xiaomi as the Trump administration continues to throw down the ban hammer on China to limit its advancements in the technology space.
One of these hurdles would be Xiaomi’s attempts to procure 5G modems from overseas suppliers. As if hearing reports about a China-based firm announcing its first 3nm SoC was not bad enough for the U.S., they will also have to bear the sight of witnessing overseas manufacturers delivering 5G modem shipments to a new supplier. These turn of events can materialize into a messy situation as far as Xiaomi is concerned, and it is possible that its dreams to compete with players like Qualcomm and MediaTek in the 3nm chipset race are cut short.
Qualcomm may refuse to supply Xiaomi its 5G modems for the custom 3nm SoC unless it charges a hefty premium; Samsung is another option, assuming trade sanctions do not put up a wall between the companies
A post from TrendForce on X highlights Xiaomi’s dependency on overseas companies for their 5G modems. While the post did not reveal specific names, past industry trends and product launches will allow us to provide an overview of which potential partnerships Xiaomi could form in the coming months. Samsung is one of those companies that can build a strong business foundation with a Chinese entity, as it has supplied Google with its Exynos 5400 5G modems for the Pixel 9 series.
Of course, Xiaomi would want nothing more than to receive parts from Qualcomm, which is regarded as the best in this particular business but also has a reputation for overcharging its customers, especially when it comes to chipsets. Given that Xiaomi’s foray into the custom 3nm chipset realm will mean lost business for Qualcomm, it may not want to enter into a business agreement unless Xiaomi is forced to pay a hefty premium for its Snapdragon 5G modems. The last name, which is also the easiest to form an alliance with, is Huawei.
#Xiaomi’s self-developed processor chip entering mass production marks a significant milestone for domestic innovation. However, the company still relies on overseas suppliers for modems. Reports suggest that Xiaomi plans to integrate its self-developed chips into smartphones and… https://t.co/veKodNc3UI
— TrendForce (@trendforce) November 28, 2024
Samir Khazaka, an industry analyst, revealed that Huawei had previously entered into a cross-licensing agreement with Xiaomi to leverage its 5G technology. The only problem is that these baseband chips lack the power efficiency of Qualcomm’s and Samsung’s offerings, and pairing this part with the custom 3nm chipset may look out of pace. After all, Huawei is limited to using SMIC’s older 7nm lithography, which comes with a bevy of compromises.
Then again, it is an option worth considering if the trade sanctions prevent Xiaomi from securing overseas 5G modem shipments. We are confident that the U.S. will be watching the Chinese firm with a close eye and as always, we will be back with more updates.
News Source: TrendForce
