Chinese government funding has helped Xiaomi produce its first smartphone processor. The support is the latest sign of China’s push to develop its semiconductor industry, which has included attempts to buy overseas chip companies for their technology.

Xiaomi is the No. 2 Chinese smartphone maker, after Huawei Technologies, able to develop its own processors.

Xiaomi chairman Lei Jun said the government funding assisted the development of the new Pinecone Surge S1 chip, which will power the company’s new budget smartphone, the Mi 5C.