China's Xiaomi continues chip strategy revamp with investment in semiconductor designer

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China's Xiaomi Corp has taken a stake of roughly 6% in compatriot...

) has taken a stake of roughly 6% in compatriot chip designer VeriSilicon Holdings Co Ltd, as the smartphone maker revamps its years-long pursuit of success in semiconductors which it sees as central to driving innovation.

The investment comes as the government identifies chips as one of several sectors in which it wants the country to become more self-reliant under its “Made in China 2025” initiative. The firm is headquartered in Shanghai and has research and development centers at home and in the United States. It typically works as a contractor to other chip companies, helping them complete additional parts of semiconductor design.Xiaomi grew rapidly since releasing its first smartphone at the beginning of the decade, becoming the fourth-biggest seller worldwide in the first quarter of this year, showed latest data from researcher IDC. However, it has had less success in chips.

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