Samsung’s Lee Visits Xiaomi’s Lei: A Strategic Pivot Amid Shifting Tech Power Dynamics

BEIJING — In a symbolic encounter reflecting the seismic shifts in global tech leadership, Samsung Electronics’ Executive Chairman Lee Jae-yong met with Xiaomi founder and CEO Lei Jun in Beijing this week. The visit, which included a tour of Xiaomi’s electric vehicle (EV) factory and discussions on future collaborations, underscores Samsung’s urgent need to reinvigorate its business amid mounting challenges, while Xiaomi cements its rise as a disruptive force in consumer tech.

Xiaomi’s Ascendance: From Underdog to Innovator

Xiaomi’s recent achievements paint a stark contrast to Samsung’s struggles. Once reliant on Samsung for critical components like OLED screens—a dependency that led to a humiliating supply cut in 2016 after a management dispute—Xiaomi has since diversified its supply chain and expanded aggressively. Its EV subsidiary, Xiaomi Auto, launched the SU7 series in 2024, positioning itself as a contender in China’s booming EV market. Meanwhile, Xiaomi’s global smartphone shipments surged in 2024, supported by domestic suppliers like BOE and TCL’s CSOT, reducing reliance on Korean displays.¹

The company’s push into South Korea itself—a market long dominated by Samsung—marks a bold reversal. In January 2025, Xiaomi launched flagship phones and smart home devices in Seoul, leveraging competitive pricing and localized marketing. This move, coupled with Xiaomi’s 45% overseas revenue share in 2024, signals its transformation from a budget brand to a global innovator.²

Samsung’s Crisis: Leadership and Market Pressures

For Samsung, Lee’s outreach to Xiaomi comes amid a perfect storm. The tech giant reported its first profit decline in three years in Q3 2022, with semiconductor revenue dropping 14% amid sluggish demand and fierce competition from TSMC in chip fabrication and Chinese firms like Yangtze Memory in storage.³ Lee himself acknowledged in internal meetings that Samsung is at a “life-or-death crossroads,” particularly in AI and advanced semiconductors, where it lags behind rivals.⁴

Samsung’s woes are compounded by leadership instability. Lee, often dubbed the “Crown Prince” for his cautious management style, has faced criticism for lacking bold vision. The company’s return on equity (ROE) has trailed TSMC’s by 14 percentage points, while labor strikes and legal battles—including a recent prosecutors’ request for a five-year jail term for Lee over a controversial merger—have further dented morale.⁵

The Beijing Meeting: Seeking Allies in a Fragmented World

Lee’s visit to Xiaomi, part of his attendance at the China Development Forum 2025, hints at strategic realignment. Sources familiar with the discussions say topics included collaboration on automotive chips and displays—a sector where Samsung aims to counter its weak position in EV-related semiconductors.⁶ For Xiaomi, closer ties with Samsung could secure advanced components for its EVs and smartphones while bolstering its credibility in premium markets.

The meeting also carries geopolitical undertones. As U.S.-China tech decoupling accelerates, Samsung—caught between its reliance on American semiconductor equipment and China’s massive market—is hedging bets. Lee’s 2024 “semiconductor diplomacy” in the U.S., including a $17 billion Texas plant, contrasts with efforts to deepen partnerships in China, where 30% of Samsung’s revenue is generated.⁷

Future Trajectory: Coopetition in the AI Era

Industry analysts predict a nuanced relationship ahead. While Samsung and Xiaomi remain competitors in smartphones and appliances, their interests align in areas like AI-driven hardware and supply chain resilience. Xiaomi’s ambition to integrate advanced displays and memory chips into its EVs could benefit from Samsung’s manufacturing prowess. Conversely, Samsung may leverage Xiaomi’s growing ecosystem to offset declines in traditional markets.

Yet challenges persist. Xiaomi’s rise has eroded Samsung’s dominance in mid-tier smartphones, while Chinese chipmakers threaten its storage business. Lee’s ability to steer Samsung through this turbulence—emphasizing innovation over legacy strengths—will define his legacy. As Geoffrey Cain, author of Samsung Rising, noted:

“The ‘emperor management’ style of Lee’s father is obsolete. Samsung must now prove it can collaborate, not just dominate.”⁸

In a tech landscape reshaped by AI and geopolitical fissures, Lee’s pilgrimage to Beijing signals more than desperation—it’s a bid to adapt, survive, and perhaps, rediscover the agility that once made Samsung a global titan.