World's biggest Chinese smartphone brand to be hit hardest by Trump administration's chip design restrictions

Xiaomi is among the first companies to be affected by new US restrictions on chip design software, a Financial Times report claims. Quoting people with knowledge of the matter, the report says that the move could severely impact China's ambitions in advanced semiconductor manufacturing.

For those unaware, Xiaomi unveiled its self-designed XRING O1 mobile processor last month. The chip—manufactured using Taiwan Semiconductor Manufacturing Company ’s (TSMC) leading-edge 3-nanometre technology is intended for Xiaomi’s newest flagship smartphones.

Meanwhile, the Bureau of Industry and Security, part of the US Commerce Department, recently ordered electronic design automation (EDA) firms to halt the supply of tools to Chinese companies, cutting off crucial software that enables the creation of cutting-edge chips.

With the new restrictions, Xiaomi’s chip may face hurdles for its reliance on EDA tools from now-restricted US providers. Though the custom chip currently represents a small share of Xiaomi’s handset sales, insiders say the company plans to use its own silicon across all future high-end smartphones and tablets.

Other brands may face similar challenges
Other Chinese firms—such as Lenovo, the world’s largest PC maker, and Bitmain, a leader in crypto mining hardware—also design their own chips using US EDA tools and TSMC’s fabrication facilities, and could face similar challenges.

While the full scope of the new US ban is not yet public, current indications suggest that existing licences may not be revoked, but future software updates and technical support will be blocked. This would effectively freeze development capabilities for Chinese firms depending on TSMC and US software.

Although TSMC is already prohibited from manufacturing advanced AI chips for Chinese firms, production of processors for smartphones, tablets, and other less sensitive applications had continued under exemptions—until now.

Big tech companies like Alibaba and Baidu have also built in-house chips, but the extent of the EDA ban’s impact on them remains unclear.