[Popular Science Post] What exactly is Xiaomi's Mystic Ring O1 SoC chip?

$XIAOMI-W(01810.HK) will release the SoC chip Xuanjie on May 22. Lei Jun has revealed that the Xiaomi Xuanjie O1 chip adopts the second-generation 3nm process technology, which has quickly attracted high attention from Xiaomi shareholders and the tech community. Many friends may wonder, what exactly is SoC? Why is it so important? What does Xiaomi's development of SoC mean for the company's future?

As a small shareholder of Xiaomi, I will discuss these questions with you today.

What is SoC? Why is it the "brain" of smart devices?

SoC (System on Chip) can be simply understood as a technical solution that integrates various modules required for a complete computing system—such as CPU (Central Processing Unit), GPU (Graphics Processing Unit), NPU (AI Unit), ISP (Image Signal Processor), baseband (communication module), etc.—onto a single chip.

This highly integrated approach not only makes the chip smaller and more power-efficient but also improves device performance and response speed. In modern smartphones, wearable devices, smart home appliances, and other products, SoC is almost the "brain" of the entire device.

For example, when we take photos, play games, watch videos, or navigate with our phones, it is the SoC that coordinates various sub-modules to complete these tasks. Without a powerful SoC, the experience of flagship smartphones would be impossible.

Why is Xiaomi developing its own SoC?

Globally, there are only a handful of tech companies with the capability to develop their own SoCs, such as Apple (A-series, M-series chips), Samsung (Exynos), Huawei (Kirin), and Qualcomm (Snapdragon). SoC development is extremely difficult and requires massive investment, but once successful, it provides greater control over products, higher differentiation capabilities, and can even directly impact the competitive landscape of the entire ecosystem.

Xiaomi first released its self-developed SoC, the Surge S1, in 2017. Although it went through a low-profile R&D period, Xiaomi did not abandon its chip strategy. In recent years, Xiaomi has successively launched the Surge C1 and C2 chips for imaging optimization, as well as the P1 and G1 chips for charging control, demonstrating Xiaomi's gradual build-up of self-developed capabilities in key components.

The newly announced "Xiaomi Xuanjie O1" adopts the world's most advanced second-generation 3nm process technology, marking Xiaomi's entry into a new phase of chip development.

What is "3nm process"? What does "second-generation" mean?

The "nm" (nanometer) in chips refers to the transistor process node. The smaller the number, the smaller the transistors, allowing more circuits to be integrated per unit area, resulting in stronger performance and higher energy efficiency.

For example, compared to the current mainstream 5nm or 4nm processes, 3nm chips can deliver stronger performance and lower power consumption in a smaller size. The "second-generation 3nm" further optimizes the first generation, with more mature technology, higher yield, and better performance.

The second-generation 3nm process adopted by Xiaomi represents the pinnacle of global chip manufacturing today, indicating that the "Xuanjie O1" is not a symbolic product but a key technology for next-generation core devices.

SoC is the "foundation," AI is the "engine" — Xiaomi's long-term strategy

Lei Jun has repeatedly stated that Xiaomi's core strategy is the "full ecosystem of people, cars, and homes," where chips serve as the technological foundation for seamless collaboration between different smart devices. In the future, whether it's smartphones, smart homes, or smart electric vehicles, SoC will be indispensable as the core computing power.

At the same time, the rapid development of AI large models demands higher computing power. With self-developed SoCs, Xiaomi can tailor chip architectures specifically for AI applications, better integrating AI capabilities into end devices to provide users with smarter and more personalized experiences.

Final thoughts: Technology is the moat of long-term corporate value

For us Xiaomi shareholders, SoC R&D may not directly reflect on the profit statement in the short term, but it is a core asset for building long-term competitiveness. Today, we see the "Xuanjie O1"; tomorrow, we can reasonably expect Xiaomi to achieve continuous breakthroughs in flagship smartphones, smart cars, AI hardware, and other dimensions.

The path of chip development is difficult, but as Lei Jun said: "We would regret not doing it." Technological innovation is never an easy endeavor, but it is these challenging investments that form part of Xiaomi's moat.

May we all witness Xiaomi's transformation from "cost-performance" to "high-tech"!