Xiaomi Hits 3nm Chip Milestone but EV Delivery Target Slips Out of Reach

Xiaomi stock nears 52-week low as revenue drops 11% and EV losses mount, but the company begins production of its first 3nm chip and prepares HyperOS 4.

Xiaomi’s stock is languishing near a 52-week low of 2.60 euros, having shed more than 40% since the start of 2026. The shares recently changed hands at 2.66 euros, and the relative strength index has fallen to 24.4, signalling deeply oversold conditions. Yet beneath the gloomy chart, the Chinese electronics and electric vehicle maker is pushing ahead with its most ambitious technology push to date.

This month, Xiaomi kicked off serial production of the Xuanjie O3 at TSMC — the first 3-nanometer application processor ever built by a mainland Chinese company and only the fourth such chip to reach the market globally. Company president Lu Weibing confirmed commercial launch in the second half of 2026, with leaks pointing to August or September. The initial device will be the foldable MIX Fold 5, and the chip is expected to score around four million points on the AnTuTu benchmark, matching Qualcomm’s Snapdragon 8E5. Xiaomi’s technological edge may be fleeting, however: both Apple and Qualcomm plan to move to TSMC’s 2-nanometer node later in 2026, leaving Xiaomi a generation behind.

Alongside the chip, Xiaomi is preparing HyperOS 4, a major operating system overhaul based on Android 17. The new software, slated for a Chinese launch in July or August and a global rollout weeks later, introduces an interactive lockscreen, deeper artificial intelligence integration, and improved privacy controls. Xiaomi describes it as a full architectural redesign rather than a routine annual update. Stable distribution begins in September with the Xiaomi 17 and 15 series.

The product offensive contrasts sharply with the company’s financial performance. In the first quarter of 2026, revenue slipped nearly 11% to 99.1 billion renminbi, while adjusted net profit plunged 43% to 6.1 billion renminbi, hammered by soaring memory-chip costs. The electric vehicle division, which generated 19.9 billion yuan in revenue, posted an operating loss of 3.1 billion yuan. To fund its ambitions, Xiaomi has earmarked roughly 40 billion renminbi for research and development this year, with more than 26,000 employees already working in R&D.

The EV segment faces a credibility test. Management has set a 2026 delivery target of 550,000 vehicles, but by May only around 150,000 units had been handed over. Analysts at Jefferies have already trimmed their forecast to 495,000, and the bank has lowered the valuation multiple for the EV business. To hit the original goal, Xiaomi would need to deliver record monthly volumes for the remainder of the year — a tall order given that sales of extended-range vehicles, the category into which Xiaomi is now entering, slumped sharply in May, even dragging down industry leader Li Auto.

The company is nonetheless forging ahead with a new sub-brand, Skynomad, whose first model — the large family SUV Kunlun — is expected to carry a price tag of around 200,000 yuan, undercutting rivals. The move marks a strategic shift: Xiaomi had previously opposed range-extender technology, but Chinese regulators have now approved such vehicles. By keeping Skynomad separate, management aims to protect the sporty image of the main Xiaomi brand.

Investors are not yet convinced. Short sellers hold roughly 9% of the free float, betting on further declines. Xiaomi launched its largest-ever share buyback — up to 20 billion Hong Kong dollars — in early June, and had repurchased about 30 million shares by mid-month, but the stock remains under pressure. The next major catalyst comes on August 26, when Xiaomi reports second-quarter results. Before that, June delivery figures will offer a more immediate read on whether the EV ramp is finally accelerating.