The Wall Street Journal claims Xiaomi is getting into the chip design business.

According to a report from The Wall Street Journal, Chinese smartphone manufacturer Xiaomi is looking to join the ranks of Apple, Samsung, and Huawei by developing its own smartphone chips. The report says the move is part of "aspirations to join the top tier" of smartphone manufacturers and an attempt to stand out from the slew of other OEMs.

For now, Xiaomi's processor is apparently called "Pinecone," and it will be released "within a month" according to the report. This might be talking about the processor of the Xiaomi Mi 6, which, if Xiaomi keeps to the usual yearly release cycle, should be out sometime in March. Xiaomi's chip design division isn't coming from nowhere—using a shell company called "Beijing Pinecone Electronics," Xiaomi paid $15 million to acquire mobile processor technology from Datang subsidiary Leadcore Technology Ltd.

Today, every Android OEM that isn't Samsung or Huawei relies on Qualcomm for high-end phone processors. Sometimes Qualcomm drops the ball, like with 2015's hotter-than-usual Snapdragon 810, and when that happens, most OEMs have no alternative. Samsung has its in-house Exynos SoC division, but most years it still ships Qualcomm devices to the US market. In 2015, Samsung used its chip diversity to its advantage and shipped Exynos in the Galaxy S6, dodging the Snapdragon 810 problems and creating the best-performing smartphone of the year.
Other times, a reliance on Qualcomm makes tackling new markets difficult. The recent LG and Google smartwatch, the LG Watch Sport, has poor performance and battery life, most likely due to the Qualcomm Snapdragon Wear 2100 SoC. The chip is built on a 28nm process, which Qualcomm last used in a high-end smartphone in 2013. Qualcomm could create a much better smartwatch chip if it wanted to, but the company probably doesn't view the small Android Wear market as worth the investment.

Samsung feels differently, and it used its own SoC line to ship a modern 16nm Exynos chip in the Gear S3 smartwatch. Apple invested in smartwatch chips, too, and the company uses a 16nm chip in the Apple Watch Series 2. Both of these devices are faster, smaller, and have better battery life than the LG Watch Sport, but because Google and LG have no chip-design teams, they have no choice but to use Qualcomm. Building a chip on a better process is just a matter of designing it and using one of the many contract chip manufacturers out there, like Samsung (currently offering 10nm) or TSMC (16nm now, with 10nm allegedly coming soon).

Supply is also apparently becoming an issue for Qualcomm SoCs. Samsung—Qualcomm's SoC manufacturer and one of the few companies with a Qualcomm alternative—is expected to be the only company with the new Snapdragon 835 device for some time, with the chip being a total no-show for Mobile World Congress 2017. Everyone else is stuck waiting until a later time to get their hands on the new chip, and this wait is apparently so bad that LG is opting to use last year's chip, the Snapdragon 821, in its 2017 flagship.

Xiaomi has struggled to launch a smartphone in the West. It keeps making moves toward doing so, like opening a US-based store, but an actual smartphone has yet to make its way to North America or Europe. Xiaomi would no doubt have to get involved in the smartphone patent wars if it comes here, and designing its own chips probably opens it to even more potential patent lawsuits. The company has fallen to fifth place in its home market of China, and it recently lost Hugo Barra, the head of its international division. It did just release innovative Xiaomi Mi Mix, which rearranged the standard layout of a smartphone to maximize screen space.

Xiaomi isn't coming to Mobile World Congress, so if we're going to hear about this SoC line, it would have to be at a separate press conference.