Xiaomi Technology is expected to unveil its next-generation Mi 5C smartphone powered by in-house developed Pipecone V670 CPU in March at the earliest, according to a Chinese-language Economic Daily News (EDN) report.

By doing so, Xiaomi will become the second smartphone vendor in China to develop and sell its own smartphone processors, after Huawei, said the report.

Xiaomi uses Qualcomm chips in some of its high-end models, but the production and sales of its Mi 5 smartphone, launched in the first quarter of 2016, were seriously affected by a shortage of Qualcomm's Snapdragon 821 chips, the report noted.

In India, Xiaomi can only market smartphones equipped with Qualcomm's CPUs due to patent issues, added the report.

By using in-house developed chips, Xiaomi's smartphone production will be no longer tied down to manufacturing schedules or supply of chipmakers and free to market its products in overseas market.

The Pinecone chips are developed and rolled out by Xiaomi subsidiary, Beijing Pinecone Electronics.

Xiaomi shipped 61 million smartphones globally in 2016, decreasing 15.6% from a year earlier, according to Counterpoint. In the China market alone, Xiaomi's smartphone shipments came to 41.5 million units in 2016, taking the fifth spot in the domestic smartphone market, according to IDC.