Xiaomi has made another major move in the smartphone chip race. The company has unveiled its new Xring O3, a high-end mobile processor that aims to give Xiaomi more control over the technology inside its phones. The chip is expected to use TSMC’s advanced 3-nanometre process, according to two people familiar with the matter. Xiaomi and TSMC have not publicly confirmed the production deal.
The Xring O3 comes about a year after Xiaomi launched the Xring O1. That first chip was an important test for the company. With the O3, Xiaomi now wants to show that its own chip design can support more powerful and more expensive devices.
The move also puts Xiaomi closer to companies such as Apple, Samsung and Huawei. These companies have spent years developing their own processors instead of relying only on chip firms such as Qualcomm and MediaTek. For Xiaomi, the goal is not simply to make a faster chip. It is also about greater control over its products and supply chain.
TSMC will make the chip
The most important part of the report is the role of TSMC, one of the world’s leading chip manufacturers. TSMC is expected to make the Xring O3 with its 3nm technology. Two sources have reported the arrangement, but Xiaomi and TSMC have not publicly confirmed the details.
This point is important because there is a clear difference between chip design and chip production. Xiaomi can design the Xring O3, but it does not have to manufacture the silicon itself. TSMC has the advanced factories and tools needed to produce chips at this level.
The use of a 3nm process shows how far Xiaomi wants to push its custom silicon. A smaller process can allow more transistors to fit into a smaller area. It can also help a chip offer more performance while using less power, although the final result depends on the complete chip design.
A chip made for premium devices
The Xring O3 is expected to appear in Xiaomi’s next flagship folding phone. Sources say Xiaomi has a shipment target of about 200,000 to 300,000 units for the chip.
That number may look small for a company that sells tens of millions of phones. However, it makes sense for a new custom processor. Xiaomi does not need the O3 to replace every Qualcomm or MediaTek chip right away.
Instead, the company can use a premium device as a test. A foldable phone also gives Xiaomi a chance to place its newest technology in a product with a higher price and a stronger focus on performance.
Xiaomi sold about 65 million smartphones in the first half of 2026. That shows why the planned O3 volume is only a small part of the company’s total phone business.
24 billion transistors inside
The Xring O3 has a very large amount of processing hardware for a mobile chip. Reports say it has more than 24 billion transistors on a die that measures about 133 square millimetres.
A transistor is one of the basic building blocks of a modern processor. A larger transistor count can give designers more room for CPU cores, graphics hardware, AI units and other functions.
The chip also uses a 10-core CPU design. Reports say all ten cores are high-performance cores rather than a mix of large and small cores. The top clock speed is reported at 4.35GHz.
That design shows Xiaomi’s focus on raw performance. Mobile chips usually use a mix of powerful and efficient cores because phones need to balance speed and battery life. Xiaomi has taken a different path with the O3.
Strong focus on graphics
Graphics are another major part of the Xring O3. The chip reportedly has a 16-core Arm G2-Ultra NX GPU.
Xiaomi claims the new GPU can deliver an 85% performance gain over the Xring O1, while power use can fall by 64% in the company’s comparison.
This could matter for high-end games and other demanding tasks. Better graphics hardware can also help with photo tools, video work and some AI features.
However, real-world phone performance will depend on more than the processor. Cooling, software, memory, battery capacity and game support all affect how well a phone performs. Xiaomi’s claims also need independent tests before users can know how the O3 performs against the latest Snapdragon and MediaTek chips.
LPDDR6 brings another first
The Xring O3 also has a focus on fast memory. Reports say it is the first mobile SoC with native LPDDR6 support. The chip can reach memory speeds of up to 10,667Mbps, with memory bandwidth of about 113.8GB/s.
Fast memory can help the processor move data more quickly. This is useful for demanding apps, games, image processing and AI tasks.
The O3 is also built with Xiaomi’s own AI goals in mind. Its NPU can provide up to 200 TOPS of tensor performance, according to reports.
That hardware can help Xiaomi run more AI tasks directly on a phone rather than sending every request to a cloud server.
AI is becoming a bigger part of the plan
Xiaomi’s chip strategy goes beyond smartphones. The company is also developing the Xring O100, a neural processing unit designed to support its MiMo AI model, and the Xring D100, which targets autonomous driving. TSMC is also reported to have a role in these chips.
This gives the Xring project a much larger purpose. Xiaomi wants its own silicon to serve several parts of its business.
The company has already invested more than 20 billion yuan, or about $3 billion, in chip development. Its semiconductor team has also grown to more than 3,000 people.
That is a major commitment for a company that only began its modern custom smartphone chip effort a few years ago.
The Xring O1 was the first test
To understand the O3, it helps to look at the Xring O1. Xiaomi launched that chip in May 2025 as its first proprietary smartphone processor.
The O1 reached more than 1 million cumulative device shipments, although only about 150,000 of those were smartphones. The chip also appeared in Xiaomi tablets and watches.
Those numbers show that Xiaomi was still at the proof-of-concept stage. The company could design and ship its own advanced chip, but it was not yet ready to place that processor across its main smartphone range.
The O3 is the next test. Its success will depend not just on benchmark scores but also on production volume, battery life, software support and Xiaomi’s ability to use the chip across more products.
Why this matters for Xiaomi
A successful custom chip can give Xiaomi more freedom. The company can design the processor around its own camera system, AI tools, software and hardware.
It can also reduce its dependence on outside chip suppliers over time. Xiaomi may gain more control over costs, product plans and supply. Its position in talks with external suppliers could also become stronger.
But this strategy is expensive. Advanced chip design costs a lot, and 3nm production is not cheap. Producing only a few hundred thousand chips also makes it harder to spread development costs across a large number of devices.
That is why the O3 should be seen as a long-term investment rather than a quick way to save money.
China still depends on advanced overseas production
There is another important side to this story. Xiaomi’s ability to design an advanced 3nm processor does not mean China can produce that chip entirely at home.
The Xring O3 is reportedly made by TSMC. This shows the difference between having the talent to design a modern processor and having access to the complete manufacturing system needed to produce it at the most advanced levels.
For Xiaomi, TSMC provides access to a production process that would be extremely difficult to duplicate. The partnership also highlights the importance of global semiconductor supply chains.
What comes next for Xiaomi
The Xring O3 is not yet a replacement for Qualcomm or MediaTek across Xiaomi’s entire phone business. The planned 200,000 to 300,000 units are far too small for that.
But that may not be the real goal at this stage.
Xiaomi has already shown that it can design an advanced mobile processor. With the O3, it wants to take the next step and place that technology in a premium product.
If the chip performs well and production goes smoothly, Xiaomi could use its future Xring processors in a much wider range of devices. Phones, tablets, AI products and cars could all become part of the company’s custom silicon strategy.
The Xring O3 therefore matters for more than one Xiaomi phone. It represents the company’s effort to control a larger part of the technology inside its products. TSMC provides the advanced manufacturing, while Xiaomi provides the chip design and the wider product strategy.
For now, the O3 is still a relatively small project in Xiaomi’s huge hardware business. But if it succeeds, it could become the foundation for a much bigger change in how Xiaomi builds its devices.
