Chinese smartphone maker Xiaomi is building a “smart plant” in Beijing to manufacture its flagship handsets, company chairman Lei Jun said at an event on Thursday, with production to begin at the end of December.

Why it matters: The manufacturing plant is a first for Xiaomi, the fourth-largest smartphone maker in the world.

  • The announcement comes on the heels of a $21 billion state-backed fund the government established on Monday to boost the country’s manufacturing industry.
  • Xiaomi currently depends on original equipment manufacturers (OEMs) such as BYD and Foxconn to produce the millions of handsets it sells every year.

Details: The plant will be capable of producing 1 million smartphones during the initial operation phase, Lei said at the World 5G Conference in Beijing, which the company later said would last one year.

  • The so-called “smart plant“ will utilize technologies such as autonomous production lines, 5G-powered robots, big data, and cloud services to increase productivity, Lei said.
  • The plant will be able to produce 60 smartphones per minute, and will cover 187,000 square meters, Lei added, an area equivalent to around 35 American football fields.
  • The company shipped some 122.6 million smartphones last year, meaning that devices produced by its in-house plant will only produce a small fraction of its smartphone output.

Context: In March, Xiaomi announced its cooperation with Shenzhen-based OEM BYD to mass-produce the Mi 9, the company’s flagship handset launched in February.

  • In a 2014 interview with Chinese media outlet Caixin, Lei stated that Xiaomi would not build its own manufacturing plant because the company was focused on smartphone research and development (R & D).
  • “Why don’t we let the best manufacturing plants work with us?… I don’t think R & D-oriented companies could do well in manufacturing, nor do I think manufacturing-oriented companies could do well in R & D,” (our translation) Lei said.

Writing about semiconductors and telecommunications.

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