Xiaomi and Oppo pushing to make their own 5G chips by the end of 2021

• Xiaomi and Oppo could be joining the race to make their own chipsets.
• One of the reasons could be to avoid Huawei’s fate, and to achieve the goals of “Made in China 2025” policy.
• It might also lead to achieving better integration between hardware and software, as demonstrated by Apple which uses its own chipsets.

Leading smartphone makers Xiaomi and Oppo could be the latest to join the custom chipset race. The news comes at a time when China is looking to boost its presence in the semiconductor industry in a bid to avoid the Huawei-TSMC situation in the future.

According to a report by DigiTimes, Xiaomi and Oppo could launch their respective sub-6GHz 5G chipsets as soon as this year, or early 2022. They will be joined by another Chinese chipmaker Unisoc in developing custom chipsets.

Xiaomi and Oppo’s decision to go ahead with developing their own chipsets stems from two likely reasons.

Reducing dependence on foreign industries

First, avoiding the fate of Huawei which was blocked from procuring chipsets from TSMC due to restrictions imposed by the US.

Huawei was amongst the most significant casualties of the US-China trade war, with the US imposing restrictions on companies from trading with Huawei. As a result, Huawei failed to procure components from companies relying on US technology. Consequently, its global smartphone shipments fell by over 40%.

Although Huawei designed its own Kirin chipsets, it depended on TSMC for production. As a result of US restrictions, Huawei’s chipset supply dried up, forcing it to sell its phone brand Honor to keep its smartphone unit alive.

In light of this, China has been working to boost its semiconductor presence – primarily through investments and by setting a target of 70% local production by 2025 as part of its “Made in China 2025” policy. For context, its local production reached a mere 16% in 2019, according to a report.

Better integration of hardware and software

While SMIC is the third biggest player with a global market share of 11%, Xiaomi and Oppo have more to gain from creating their own chipsets – it could allow for better integration of hardware and software.

This is backed by the fact that Apple has managed better performance every year with its custom silicon when compared to Qualcomm’s flagship chipsets, which are used by Android smartphone makers.

Further, even Google is reportedly gearing up to launch its first smartphone powered by its own chipset, codenamed ‘Whitechapel’. A report by 9to5Google suggests that the upcoming Pixel 6 smartphone will be powered by Google’s GS101 Whitechapel chipset, although details are scarce at this point.

While Apple has been successful in combining hardware and software to eke out the best performance from its chipsets, it’s not always guaranteed. Samsung is an example as it uses its own Exynos chipsets in its phones, but the performance in the Qualcomm variants of its phones is said to be better on most occasions.

Although Xiaomi is new into the semiconductor space – it announced its first chipset, the Surge S1, in 2017 – it finally has the motivation needed to put in serious work. With Oppo joining in, too, this could be the beginning of a new chapter in the semiconductor and smartphone industry.

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