Emir BardakçıIn a captivating annual speech, Xiaomi founder, chairman, and CEO Lei Jun shared an incredibly candid and introspective look into the journey of the company’s self-developed chip ambitions. The story of the Surge S1 chip is one of both early promise and a hard lesson learned, but it’s a story that beautifully illustrates Xiaomi’s resilience and its relentless pursuit of innovation. From its inception in 2014, with the establishment of its wholly-owned subsidiary Pinecone Electronics, to the successful launch of the Surge S1 in the Xiaomi 5C—which sold over 600,000 units—the initial signs pointed to a bright future. For more insights on Xiaomi’s innovation journey, check out our articles on the latest Xiaomi HyperOS updates and our breakdown of the cutting-edge HyperConnect ecosystem.
Why Starting Small Was a Big Mistake
Despite that initial success, Lei Jun revealed that he knew in his heart that the Pinecone project was on shaky ground. In 2018, Xiaomi made the difficult decision to pause the development of its SoC chips, retaining only some peripheral chip work. This was a critical turning point that led to a surprising realization: for a company to successfully develop its own mobile phone SoC, it must start at the very top. As Lei Jun noted, industry giants like Apple and Huawei both started their chip endeavors with high-end designs. Attempting to enter the market from the low-end, as Pinecone did, was a strategic misstep.
A New Era of Core Technology
Beyond the strategy, internal collaboration also proved to be a major hurdle. Pinecone operated as an independent subsidiary, which created a disconnect and made it difficult to work closely with the mobile phone division. This was a key learning experience that helped shape Xiaomi’s future direction.
In 2020, as Xiaomi celebrated its tenth anniversary, Lei Jun was grappling with a fundamental question about the company’s next decade. After extensive internal discussions, the path became clear: a massive investment in core underlying technologies. The goal was to evolve from being seen as an “Internet company” into a “hardcore technology company.”
This new direction meant restarting chip development in 2021, a move Lei Jun acknowledged was a huge risk. The company was investing tens of billions of yuan, or roughly $1.4 billion USD, and Lei Jun stated that a second failure could permanently damage market confidence. He also referenced other companies exiting the chip space in 2023, emphasizing Xiaomi’s determination to persevere.
The Triumph of Perseverance
This renewed commitment has already yielded promising results. At a recent press conference, Lei Jun excitedly shared the news of Xiaomi’s latest self-developed SoC, the XRING O1. The first test run of the chip was a resounding success, with the system turning on and all modules fully debugged within a day.
This journey is a testament to Xiaomi’s philosophy. As Lei Jun put it so eloquently, “Failure itself is not terrible, facing the fear in your heart is the key.”
