(Yicai Global) March 2 -- Xiaomi Corp. has become the world's fourth smartphone maker to unveil its own-design mobile processor. The chip's development had been the subject of speculation for more than two years.
Company founder and Chief Executive Lei Jun introduced the Surge S1 at a crowded event in Beijing's China National Convention Center on Feb. 28. Xiaomi developed the chip, which will be positioned in the high-end market, at a cost of CNY1 billion (USD145 million).
"The move is an essential next step in our development," Lei Jun said at the launch. "The ability to create its own chip sets is the pinnacle of achievement for any smartphone company."
The Beijing-based startup joins the ranks of Apple Inc., Samsung Electronics Co. and Huawei Technologies Co. in developing its own mobile processor. Like them, it aims to diminish its reliance on overseas semiconductor makers such as US-based Qualcomm Inc., the leading chip supplier.
"Processor chip manufacturing is the pinnacle of the whole smartphone industry," said Lei. "A great company in the sector must have a grasp of this core technology."
"Competition in the mobile phone industry has become more intense, so all manufacturers need to have a breakthrough in this core technology," he added.
Xiaomi's star rose a few years ago with an online marketing model, but the company has since met severe domestic sales challenges in China's cutthroat smartphone market. Its handset shipments slumped 36 percent to 41.5 million last year, from 64.90 million the year before, according to figures from data company IDC China.
Lei also said his company will start producing its own screens, cameras and other core devices. "We'll have better cooperation with suppliers only when we have the ability to self-produce, then we can make our own unique products," he told Yicai Global.
With regard to the future market of Xiaomi's Surge S1 chip, Lei said, "I'm more concerned about word of mouth and experience. If it gets good word of mouth, it will sell well. I think shipments are only the result, definitely not the target."
"I'm confident in this chip because I have used it for six months and its quality has been very stable," he said. "Now it's going to be tested by users."