China Xiaomi Continues Redesign of Chip Strategy by Investing in Semiconductor Designer

SHANGHAI (Reuters) – The Chinese company Xiaomi Corp. (1810.HK) took a stake of about 6% in its fellow chip designer, VeriSilicon Holdings Co Ltd, as the smartphone maker reorganizes its long quest for success in the semiconductor industry, which it considers essential to boost innovation.

The investment comes as the government identifies chips as one of many sectors in which it wants the country to become more autonomous as part of its "Made in China 2025" initiative.

In a document filed online Thursday with the Chinese Securities Regulatory Commission (CSRC), VeriSilicon revealed that a fund managed by Xiaomi had become its second largest external shareholder in June.

Xiaomi Corp confirmed the investment to Reuters. None of the companies has disclosed its monetary value.

VeriSilicon's largest external shareholder is the China Investment Circuit Industry Fund, a centralized national fund for the domestic semiconductor industry, better known as The Big Fund.

The company is headquartered in Shanghai and has research and development centers on its territory and in the United States. He usually works as an entrepreneur for other chip companies, helping them to complete additional elements of semiconductor design.

CHIPS FAR

Xiaomi has seen rapid growth since the release of its first smartphone early in the decade, becoming the world's fourth largest seller in the first quarter of this year, showed the latest data from IDC researcher. However, he had less success in chips.

The company launched a semiconductor division in 2014 and three years later, it announced its first on-chip system, the Surge S1. The Xiaomi Mi 5 smartphone chip has not been deployed more widely.

Subsequently, no major flea announcements were announced until April: an internal memo indicated that Xiaomi was to divest a portion of its chip business to a subsidiary called Big Fish, which specializes in chip manufacturing for Internet devices. -of-Things.

Xiaomi is not alone in his smart ambitions. Huawei's HiSilicon subsidiary, which specializes in chip manufacturing, manufactures Kirin processors for its own smartphones, which experts say is roughly competitive with the high-end chips of US-based Qualcomm Inc. (QCOM.O).

In the broad technology area, Alibaba Group Holding Ltd (BABA.N) Last year, the Chinese chip maker C-Sky was bought. Its chief technology officer later announced that the company would unveil its first artificial intelligence chip in the second half of 2019.

A trade war with the United States resulting in tariffs on technological goods and services has been strengthened, while a US ban on supplying Chinese telecom equipment manufacturer Huawei Technologies Co Ltd because of national security concerns also disrupted the sector.