Author: Tronserve admin
Sunday 25th July 2021 04:48 AM
China's Xiaomi Continues Chip Strategy Revamp with Investment in Semiconductor Designer
China’s Xiaomi Corp (1810.HK) has taken a stake of around 6% in compatriot chip designer VeriSilicon Holdings Co Ltd, as the smartphone maker revamps its years-long pursuance of success in semiconductors in which it sees as central to driving innovation. The investment comes just as the government identifies chips as one of many industries in which it wants the country to become more self-reliant under its “Made in China 2025” initiative.
In a filing to the China Securities Regulatory Commission (CSRC) shared online on Thursday, VeriSilicon unveiled a fund run by Xiaomi became its second-largest external shareholder in June. Xiaomi Corp confirmed the investment to Reuters. None of the companies unveiled its monetary value.
VeriSilicon’s biggest external shareholder is the China Integrated Circuit Industry Investment Fund, a centralized, national-level fund for the domestic semiconductor industry, popularly known as “The Big Fund”. The firm is based in Shanghai and has research and development facilities at home and in the United States. It mainly works as a contractor to other chip companies, assisting them complete additional parts of semiconductor design.
Xiaomi expanded swiftly since releasing its first smartphone at the beginning of the decade, starting to be the fourth-biggest seller worldwide in the first quarter of this year, revealed latest data from researcher IDC. In spite of this, it has had less success in chips.
The company formed a semiconductor division in 2014 and three years later announced its first system-on-a-chip, the Surge S1. The chip featured in Xiaomi’s Mi 5C smartphone yet was not rolled out more broadly.
Subsequently, there were no big chip announcements until April when an internal memo stated that Xiaomi would spin off part of its chip division into a subsidiary called Big Fish focused on making chips for internet-of-things devices. Xiaomi just isn't alone in its chip ambitions. Huawei’s chip-making HiSilicon subsidiary makes Kirin processors for its own smartphones, which experts said are approximately competitive with top-of-the-line chips from U.S. leader Qualcomm Inc (QCOM.O).
In the wider tech sphere, e-commerce major Alibaba Group Holding Ltd (BABA.N) last year bought Chinese chipmaker C-Sky. Its chief technology officer later said the firm will unveil its first artificial intelligence chip in the second half of 2019. Adding impetus to such initiatives is a trade war with the United States involving import tariffs required on technology goods and services, while a U.S. ban on supplying Chinese telecom equipment maker Huawei Technologies Co Ltd as a consequence of national security concerns has also interrupted the industry. Xiaomi is set to announce quarterly earnings results in the second half of August, marking the firm’s first reporting period one full year after it listed in Hong Kong. In that time, the smartphone vendor’s market value has fallen from $54 billion upon listing to its current HK$245.5 billion ($31.40 billion).