China's Xiaomi Continues Chip Strategy Revamp with Investment in Semiconductor Designer

 

In a filing to the China Securities Regulatory Commission (CSRC) published online on Thursday, VeriSilicon reported a fund run by Xiaomi became its second-largest external shareholder in June. Xiaomi Corp verified the investment to Reuters. None of the companies disclosed its monetary value.

 

VeriSilicon’s biggest exterior 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 hubs at home and in the United States. It mainly works as a contractor to other chip companies, helping them complete additional parts of semiconductor design.

 

Xiaomi expanded rapidly since launching its first smartphone at the beginning of the decade, growing to be the fourth-biggest seller worldwide in the first quarter of this year, exhibited latest data from researcher IDC. At the same time, it has had less success in chips.

 

The company opened a semiconductor division in 2014 and three years later unveiled its first system-on-a-chip, the Surge S1. The chip featured in Xiaomi’s Mi 5C smartphone but yet wasn't rolled out more extensively.

 

After that, there were no great 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 objectives. Huawei’s chip-making HiSilicon subsidiary makes Kirin processors for its own smartphones, which experts said are nearly competitive with top-of-the-line chips from U.S. leader Qualcomm Inc (QCOM.O).

 

In the greater 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 release 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 imposed on technology goods and services, while a U.S. ban on supplying Chinese telecom equipment maker Huawei Technologies Co Ltd due to national security concerns has also disturbed 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 billion upon listing to its current HK5.5 billion (.40 billion).

 

Source: TRONSERVE