The chip, which will be attached to the satellites of BeiDou Navigation Satellite System, was unveiled by the Global Navigation Satellite System and Location Based Service (GNSS & LBS) Association of China (GLAC).
The positioning accuracy of the chip reaches at sub-metre level without ground-based augmentation, state-run Xinhua news agency reported.
The chip, developed by Shenzhen-based Allystar Technology, has been earlier used in unmanned driving systems, wearable devices, precision agriculture and smart logistics.
The chip supports the new generation of BDS-3 satellites for high-precision navigation and positioning, the report said.
The value of the satellite navigation and LBS industry stood at 212 billion yuan (USD 31 billion) in 2016, up 22.1 per cent from 2015, according to the GLAC.
Core output totalled 80.8 billion yuan, 70 per cent of which came from BDS.
Four BeiDou-3 satellites will be launched by the end of this year, and a complete global satellite navigation system would be put in place by around 2020, according Yang Changfeng, the system's chief designer.
The scale of the BDS industry will reach 240 billion yuan by 2020, said Yang.
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