Xiaomi, Oppo invest in Jiangsu chip firm for reliable supplies

Chinese mobile phone companies are becoming shareholders of domestic chipmakers to secure semiconductors at a time when China- US political friction makes US supplies very unreliable for Chinese phone vendors.

In one recent example, Xiaomi and Oppo became shareholders of Jiangsu Changjing Electronics Technology Co, a semiconductor maker based in East China’s Jiangsu Province, according to company information website qcc. com.

It’s unclear how large the stakes are, but the qcc. com data showed that Jiangsu Changjing’s registered capital surged by 12.67 percent to 357 million yuan ($ 55.3 million) after Xiaomi, Oppo and seven other companies became shareholders. Xiaomi and Oppo are both clients of Jiangsu Changjing.

The investment has led to market speculation that Xiaomi wants to resume making chips. Xiaomi launched an independently researched chip in 2017, but didn’t make any further progress.

Xiang Ligang, an independent telecom analyst, interpreted the investment more as a move by domestic phonemakers to secure their supply chains rather than a signal that they will invest on a large scale in the chip sector. “Xiaomi’s and Oppo’s investments in chip companies can not only secure chip supplies for them, but also enhance the quality of chip products by supporting upstream companies’ research and development,” Xiang said.

Chinese mobile phone producers have come to realization that they can’t rely on overseas suppliers, particularly US companies, after Huawei was taken by surprise by the US government’s restrictions on US companies’ supplies to the company.