Last month, the highly anticipated EV car from Chinese brand Xiaomi, the SU7, was officially launched, gaining attention from various industries. As the Chinese saying goes, outsiders watch the excitement while insiders watch the doorway. Both domestic and foreign automotive manufacturers and suppliers are seizing the opportunity presented by the success of Xiaomi’s entry into the automotive market to further explore development opportunities in China.
Looking at the configuration of the Xiaomi SU7, its lineup of core component suppliers is impressive, bringing together numerous domestic and international component manufacturers to provide strong support for Xiaomi’s car in terms of high quality and outstanding performance. Among them, Xiaomi’s overseas supply chain includes globally renowned suppliers such as Bosch, Brembo, and CATL.
Source: Xiaomi
The popularity of Xiaomi’s car demonstrates the promising future of the Chinese automotive industry, particularly in the field of electric vehicles, which are gaining momentum worldwide. Currently, the domestic supply rate of Chinese automotive chips is only around 10%, with 90% relying on imports. With the rapid growth of sales in new energy vehicles, the demand for chips, whether it be traditional microcontroller unit (MCU) chips or sensors and intelligent sensor chips brought about by digitalization, is skyrocketing. Among all the chips, MCU chips, which are functional chips that can realize all control functions of a vehicle with a single chip, are the most important and technologically advanced. Currently, the market for automotive-grade MCU chips in China is mostly dominated by foreign manufacturers. The top seven suppliers currently occupy nearly 98% of the global MCU market, namely Renesas, NXP, Infineon, Cypress, Texas Instruments, Microchip, and STMicroelectronics, with no Chinese manufacturers among them.
Under the complex trends in global chip development, the research and development of domestically produced chips in China is also progressing rapidly. It is worth noting that the development of domestic chips in China does not mean the exclusion of overseas suppliers from the Chinese market. Instead, it embodies the exploration of new cooperation models between Chinese and foreign manufacturers.
The development suppliers involved in the research and development of the Xiaomi SU7 include its long-time partner Qualcomm, as well as foreign companies such as NVIDIA and Brembo. Qualcomm, as Xiaomi’s largest supplier, provides chips that are used in almost all of Xiaomi’s electronic products. The new model of Chinese-foreign cooperation extends beyond direct import and export, encompassing research and development collaboration and manufacturing win-win situations, becoming a new strategy for global suppliers to make their mark in the Chinese market.
The development of China’s new energy vehicles can drive technological innovation worldwide. The strength of one party does not mean the suppression of another; instead, it promotes greater and more refined development dynamics within the entire industry. Faced with a growing and increasingly refined market like a delectable cake, how can overseas suppliers stand out and seize more market opportunities?
The success of Xiaomi’s car is not only due to its superior product performance but also to Xiaomi’s consistent strategy of offering high cost-effectiveness. With design and functionality comparable to Porsche and a price closer to Tesla, the Xiaomi SU7 has gained widespread attention in the Chinese market, especially among the younger generation. As overseas suppliers enter the Chinese market, offering high cost-effectiveness can be a significant advantage.
In addition, many large industry exhibitions in China provide valuable opportunities for domestic and foreign companies to exchange and collaborate. The upcoming Beijing Auto Show this month will feature numerous domestic and international brands. In addition to showcasing new technologies and products, proactive participation in these trade shows allows overseas semiconductor manufacturers to view them as windows of opportunity to connect with the Chinese market.
At Influence Matters, we possess extensive experience in assisting international semiconductor players in successfully entering and flourishing within the Chinese market while effectively showcasing their unique advantages in the field. We are thrilled to announce our participation in this year’s Beijing Auto Show, where we will provide unwavering support to our clients and engage in insightful discussions with industry experts. Connect with us today to embark on a remarkable journey towards boosting your business.
