Xiaomi Bets EUR 24 Billion on Self-Developed Chips and a German Dealer Network

Xiaomi commits EUR 24 billion to R&D for 2026-2030, debuts XRing O3 chip and 18 Fold, and signs letters of intent with eight German dealer groups.

Xiaomi used the IFA stage in Berlin to unveil a dual-pronged growth strategy that reaches well beyond its smartphone roots: a EUR 24 billion research and development commitment spanning 2026 to 2030, paired with a first foothold in Europe's electric vehicle market.

The spending plan targets artificial intelligence, operating systems, semiconductors, smart vehicles, robotics and advanced manufacturing. It amounts to a declaration of technological self-sufficiency — one that management clearly wants investors to read as a structural shift rather than a routine budget line.

XRing O3 Signals Chip Ambitions

The clearest evidence of that intent arrived on Monday with the debut of the XRing O3, Xiaomi's in-house AI processor. CEO Lei Jun placed the chip's performance directly alongside Apple's A19 Pro, a deliberate juxtaposition aimed at both investors and rivals: Xiaomi no longer sees itself as a component buyer but as an independent silicon developer.

The processor powers the new 18 Fold, the company's most expensive foldable to date. Reuters reported that the device was unveiled on 7 September, with the China sales launch following three days later. Since the foldable went on sale, the stock has shed roughly 1.6%, suggesting the premium handset alone has yet to generate meaningful buying interest.

The timing of the launch was anything but accidental. Xiaomi positioned the 18 Fold ahead of Apple's own foldable debut, while Huawei presented a competing clamshell on the same day — a collision that underscores how fiercely China's premium smartphone segment is now contested. The 18 Fold relies on the self-developed Xring O3 chip and components from Chinese suppliers, according to Reuters.

Eight German Dealer Groups, a 2027 Target

Alongside the product offensive, Xiaomi signed letters of intent with eight German automotive dealer groups at IFA, laying the groundwork for a European EV market entry in 2027. The move complements an expanding car business at home, where the Sky Nomad N70 Pro, N70 Max and N90 Max were officially presented on Monday. Growth in China, expansion into Europe — the two-track approach is designed to reduce reliance on any single sales region.

That ambition runs into regulatory headwinds elsewhere. India's Serious Fraud Investigation Office recommended more than a month ago a detailed probe into Xiaomi's local operations, citing possible irregularities in its business model and in foreign investment rules. Reuters reported that the investigation would examine money flows and potential violations of Indian investment regulations. Xiaomi told Reuters it had not yet received formal notice from the authority. Since the recommendation surfaced, the shares have added roughly 1% to 2% — a sign that the India question currently weighs less with investors than the product headlines.

Chart Still Shows the Scars

The stock's recent 2.3% rebound to EUR 2.91 has done little to repair the broader picture. The shares remain well below their 50-day moving average of EUR 3.02. Over the past twelve months the decline is stark: a drop of about one-third since the start of the year, and roughly half compared with a year ago. From the 52-week high of EUR 6.54 set at the end of September last year, the stock has lost more than 50%. The past seven trading sessions alone brought a 6.5% slide.

What investors face is a company betting billions on chips and a German dealer network to open new growth lanes, set against an unresolved Indian investigation and a share price that has yet to signal any durable turnaround. Whether technological and geographic diversification can restore lost confidence will only become clear over the coming quarters — and only once the regulatory fog in India lifts or hard sales figures for the new foldable emerge.