Xiaomi, the Chinese smartphone maker, unveiled the Xring O3 on Monday, its second attempt at designing a processor in-house rather than buying one from an external supplier.
The chip arrives a year after the Xring O1, and continues the world's third-largest smartphone vendor's effort to follow Apple, Samsung Electronics and Huawei in controlling its own silicon.
Taiwan Semiconductor Manufacturing Company (TSMC), the contract chipmaker that builds processors for Apple and others, will produce the O3 on its 3-nanometre process, according to people familiar with the matter.
The same people said the chip is expected to power an upcoming flagship folding phone, with a shipment target of 200,000 to 300,000 units.
That figure underlines the gap between Xiaomi's stated ambition and the volumes it is actually shipping.
The company sells hundreds of millions of handsets a year, yet has sold only about 150,000 phones running the O1 since its launch in May 2025.
Including tablets and watches, cumulative shipments of O1-powered devices passed 1 million units, Xiaomi said on an earnings call last week.
A system-on-chip, the type of component Xiaomi is designing, packs computing, graphics, artificial intelligence and imaging functions onto a single piece of silicon.
Building one internally is expensive and slow, but it gives Xiaomi what Qualcomm and MediaTek cannot: control over the roadmap and hardware tuned to its own software.
For now, that control extends to only a sliver of Xiaomi's vast range, making the O3 a marker of intent rather than a clean break from its chip suppliers.