Xiaomi partners with Leadcore in pursuit of its own chipset

Xiaomi has quickly risen to a dominant force in China’s smartphone markets, besting both HUAWEI and Samsung in Q1 2015. Perhaps it’s fitting then that the smartphone company is now looking to begin designing products using its own custom processors. Rather that swallowing the huge expense that would be associated with setting up its own processor design team, Xiaomi has partnered up with fabless chip company Leadcore.

Marshal Cheng, vice president of Leadcore, has confirmed that the company is working with Xiaomi on “all three different levels — product, technology and patent”. The latter is particularly important, as Xiaomi has been looking to build on its rather small patent portfolio to help better defend itself as the company expands into competitive overseas territories. Importantly, Leadcore also owns some technologies for Chinese TD-SCDMA 3G standard and has access to LTE and LTE-A patents.

“The modem technology that’s ready in silicon and patent portfolio created by CATT including LTE and LTE-A make us very attractive to Xiaomi,” – Leadcore’s Marshal Cheng

As for why Xiaomi is interested in its own processor design, diversification and patent protection are probably the two main points. Xiaomi is clearly intent on expanding much further than Asia, but with it comes the risk of increased legal action and expenses. This is part of the benefit of using Qualcomm processors, as the chip designer owns patents that protects smartphone manufacturers as they expand abroad. Xiaomi is likely to want to shed this dependence on Qualcomm, and Leadcore could give them access to the patents and custom CPU design experience that it needs.

There’s also the added benefit of superior product differentiation compared with the range of other Chinese smartphone manufacturers, which all leverage processor designs from Qualcomm and MediaTek. Xiaomi may also be able to strike a better deal for large volumes of chips if it’s leveraging its own design, which is something that smaller Chinese companies are not so concerned with. Not to mention that its own SoC range would elevate Xiaomi closer to rivalling Samsung, which has its own Exynos SoC line-up, and HUAWEI’s HiSilicon designs.

It’s likely to be a while before we hear anything official from Xiaomi regarding any potential custom designs chips, but this seems like a sensible course of action for one of the industry’s fastest growing manufacturers.