Meta and Byte compete for Qualcomm, and the Metaverse holds up another sky for semiconductors?

This time, domestic semiconductor manufacturers do not want to be stuck again.

In a series of recent public speeches by Qualcomm CEO An Meng, the frequency of the Metaverse has remained high: sharing the cooperation process with Meta and ByteDance, talking about the commercialization prospects of the Metaverse, and Qualcomm’s leading position in this track Give full affirmation.

The reason why Anmon frequently builds momentum for the Metaverse is closely related to Qualcomm’s next stage of development strategy. The Institute of Value (ID: jiazhiyanjiusuo) has analyzed in previous reports that it is now a critical period for Qualcomm to transform into revenue diversification.

The latest financial report shows that Qualcomm’s RF front-end, automotive, VR/AR hardware and other business revenue has grown in an all-round way, and the year-on-year growth rate of IoT business revenue is as high as 61%, reaching 1.72 billion US dollars. Among these new businesses, the Metaverse has always been the focus of Qualcomm.

However, the Meta, ByteDance and VR/AR chip markets are far from satisfying Qualcomm’s appetite. It can be seen from Anmon’s latest speech that Qualcomm’s ambitions have been expanded to all Metaverse-related tracks such as the Internet of Things and AI artificial intelligence.

“Qualcomm’s early investment has made the Snapdragon platform the first choice for connecting the physical and digital worlds.”

However, this familiar scene is not necessarily a good thing for downstream hardware equipment manufacturers and semiconductor manufacturers, especially local Chinese manufacturers.

Meta and Byte compete for Qualcomm, and the Metaverse holds up another sky for semiconductors?

(Image from UNsplash)

After winning Meta and ByteDance, is Qualcomm’s new financial road stable?

Earlier this week, Qualcomm CEO Ammon spoke to the media about the latest cooperation plans between Qualcomm and Metaverse players.

“Qualcomm will continue to maintain existing partnerships with Metaverse industry giants such as Meta and Microsoft to provide hardware and software support for their expansion of XR business. Meta is our largest partner at this stage. In addition, Qualcomm has also established a partnership with ByteDance. The partnership will provide technical services for Tik Tok VR.”

It is worth noting that, considering the still severe crisis in the semiconductor industry chain and the very tight production capacity of Qualcomm, the competition between Meta and ByteDance for Qualcomm chips may become more intense.

According to foreign media reports, since March, the delivery date of Qualcomm’s full range of chip equipment and components has been extended to more than 30 weeks, and the delivery cycle of CSR Bluetooth audio chips has exceeded 33 weeks.

The Institute of Value (ID: jiazhiyanjiusuo) previously reported “Qualcomm’s Q1 performance exploded! Mi OV’s defection and MediaTek’s attack are not a problem? ” also analyzed that it is now a critical period for Qualcomm to transform into revenue diversification.

Since the third quarter of last year, one-third of Qualcomm’s revenue has come from non-mobile phone business, and the diversification transformation has begun to show results. The latest financial report shows that Qualcomm’s RF front-end, automotive, VR/AR hardware and other business revenue has grown in an all-round way, and the year-on-year growth rate of IoT business revenue is as high as 61%, reaching 1.72 billion US dollars.

Among these new businesses, the Metaverse has always been the focus of Qualcomm’s attention, and it has been in constant motion for some time in the past:

At the MWC2022 conference, Qualcomm announced that it would invest 100 million US dollars to establish the Snapdragon Metaverse Fund, and at the same time announced the news that it had reached a cooperation agreement with ByteDance; at the CES International Consumer Electronics Show in January this year, Anmon announced that it will jointly develop a new technology with Microsoft. A generation of energy-efficient, ultra-light AR glasses with custom Snapdragon chips that will be fully used in the Microsoft ecosystem.

As for the Metaverse diehard Meta, it is Qualcomm’s most trusted partner and the number one sponsor at this stage.

Official data shows that Reality Labs, a subsidiary of Meta, invested $10 billion in the research and development of Metaverse projects in the past fiscal year, and the investment in the first quarter of this year also reached $3 billion.According to the data provided by Meta, the best-selling Oculus Quest VR devices, Portal video chat devices and first-generation AR smart glasses, RAY Ban Stories, all use Qualcomm’s high-performance chips without exception.

Although Meta has not fully disclosed the sales of these hardware devices, it can be seen from the statistics of multiple third-party organizations and the remarks of the executives of Meta and Qualcomm that the sales of Oculus Quest series products are very impressive.

According to Valve’s Steam monthly user hardware survey, as of the third quarter of last year, Meta had a market share of more than 35% in the VR headset market, and the goal of 10 million units set by former Facebook CTO Andrew Boswarts is a certainty.

Considering that the top-selling Oculus Quest 2 series uses Qualcomm’s Snapdragon XR2 processor, Qualcomm’s profit from Meta will naturally not be a small amount.

In addition to Meta’s Oculus Quest series, there are many VR/AR hardware on the market that are also equipped with Qualcomm XR2 processors: iQIYI’s Qiyu Dream VR released at the end of last year, and Byte’s PICO are all equipped with XR2 processors , Lenovo’s ThinkReality split AR glasses are equipped with the Snapdragon XR1 chip.

Statistics from the CCID Research Institute show that in the first three quarters of last year, the global AR/VR industry completed a total of 248 financing and mergers and acquisitions, with a total financing of 40.71 billion yuan, almost double the total investment and financing in 2020.

With the increasing number of players on the track, AR/VR hardware shipments will inevitably continue to rise, which brings a steady stream of business to Qualcomm. According to the forecast of CCID Research Institute, the global shipment of VR/AR terminal equipment is expected to reach 75 million units in 2024, with huge growth potential.

However, Meta, Microsoft, ByteDance, and Lenovo are still far from satisfying Qualcomm’s appetite. It can be seen from Anmon’s latest speech that Qualcomm wants more, and there are still many treasures in the cornucopia of the Metaverse waiting for them to dig.

“I think the Metaverse is a huge business and investment opportunity, and the best is yet to come. It’s really a really big opportunity, as big as a smartphone.”

More than VR/AR, Metaverse provides more imagination space for the semiconductor industry

It has been a while since the concept of the Metaverse was born. The commercialization scenarios have been further enriched, and the development prospects of related industries have become clearer than before. In the view of the Institute of Value (ID: jiazhiyanjiusuo), the concept of Metaverse is not limited to VR/AR and game scenarios. It has broad application prospects in various fields such as intelligent Internet of Things, smart city construction, social networking, and content services.

This can also be reflected in the increasingly popular primary financing market.

In April last year, Epic Games completed a new round of financing of US$1 billion for the development of Metaverse-related businesses, which is the highest financing record on the Metaverse track. In addition, cloud computing service company Haima Cloud, virtual community platform Xiaoyuan World, distributed chip developer Nano Labs and other related companies have successfully received a new round of financing in the past year.

Looking at the above-mentioned enterprises and industries, the Internet of Things is a high-frequency word, and the Internet of Everything and the Metaverse that many technology giants are thinking about are like a pair of “soul mates” with a high degree of adaptation.

In the “2022 AIoT Industry Panorama” released not long ago, the combination of the Metaverse and the Internet of Things in various application fields is also listed: for example, various sensor companies provide the basis for physical contact with the Metaverse, such as smart buildings, In infrastructure fields such as smart cities, augmented reality functions are already being applied to move closer to the concept of the Metaverse.

In the process of Metaverse landing in these application scenarios, the importance of semiconductor chips is self-evident, and Qualcomm has also aimed at opportunities to expand its business layout in the past year.

In June last year, Qualcomm released seven chips specifically for IoT devices in one go, targeting fields such as medical, industrial handheld devices and digital signage. Among them, the most concerned is the QCS8250, which supports up to seven cameras running simultaneously and can provide high-speed encoding at 120 frames per second and 4K resolution.

It can be seen from the performance that Qualcomm has injected higher computing power and AI technology into these chips. In Anmon’s mouth, this is the “key to the Metaverse”.

In addition to stepping up research and development of new products, Qualcomm has also expanded its power territory through various acquisitions and external cooperation.

Public information shows that in the past year, Qualcomm has successively acquired Austrian AR development tool platform Wikitude, French gesture tracking and gesture recognition company Clay AIR, and has cooperated with Huaguan Communications, Honeywell, Zebra Technology and other IoT industry chains upstream and downstream. important enterprises to reach a cooperative relationship. According to Qualcomm’s plan, by 2024, the revenue of the Internet of Things-related business will grow to 9 billion US dollars, which is a direct five-fold increase from the current 1.72 billion US dollars.

Of course, competitors such as Nvidia, Intel, AMD, and MediaTek are also eyeing the Metaverse. But so far, these semiconductor giants have bypassed each other’s hinterland very “tacitly”, forming obvious dislocation competition.

MediaTek, through its subsidiary Dafa Technology, has deployed in the fields of Bluetooth wireless audio and switch chips. Although it is also aimed at the Internet of Things market, its scope is far less than that of Qualcomm. Nvidia is building its own Metaverse platform Omniverse and making AI-related products. With its leading edge in GPU technology, Nvidia is also very confident.

In other words, Qualcomm is turning VR/AR and IoT into its next home. And unlike the smartphone market, Qualcomm doesn’t have to worry about the “defection” of big customers like Apple and Samsung.

In the final analysis, whether AR/VR or IoT device chips, the R&D threshold is very high. In April of this year, foreign media reported that Meta had suspended the self-developed chip plan for AR glasses products and decided to continue its partnership with Qualcomm. This self-developed chip program, internally code-named “Brasilia”, has faced many difficulties since its automatic launch. Talents, funds, and equipment have all become stumbling blocks for this technology giant.

It’s no wonder that Qualcomm CEO Ammon can publicly express his ambitions:

“Qualcomm’s early investment has made the Snapdragon platform the first choice for connecting the physical and digital worlds.”

However, this familiar scene is not necessarily a good thing for downstream hardware equipment manufacturers, especially the booming affiliated companies in China.

Metaverse “new infrastructure” track, local companies do not want to be stuck

In the era of consumer electronics booming, semiconductor giants such as Qualcomm, Nvidia, AMD, Intel, etc. are the absolute rulers of the industry, and they are also the haze shrouded in the heads of local semiconductor manufacturers.

Taking the most important smartphone market as an example, Qualcomm’s high-end Snapdragon chip shipments have maintained a year-on-year growth of more than 20% in the past year. Chinese mobile phone manufacturers such as Xiaomi, OPPO, vivo, and Honor all require Qualcomm to supply a large amount. According to CINNO statistics, in the first quarter of this year, Qualcomm accounted for 35.9% of China’s smartphone SoC market, and Huawei’s HiSilicon shipments, which continue to be sanctioned, plummeted by 82% year-on-year. The gap between the two is getting wider and wider.

Meta and Byte compete for Qualcomm, and the Metaverse holds up another sky for semiconductors?

(Image from CINNO Research)

Now that the Metaverse is taking the world by storm, Qualcomm is once again at the forefront of the semiconductor industry.

According to statistics from China Securities, among the popular VR terminal hardware currently on the market, screen, storage and processor cost account for the highest proportions, while AR hardware is dominated by optical displays and processors. Enterprises naturally become the core of the industrial chain.

Seeing the current strong performance, and thinking about the experience of the smartphone market being stuck by Qualcomm, local semiconductor and hardware manufacturers need to sound the alarm in time.

Fortunately, domestic manufacturers have learned their lessons and have already begun to make arrangements.

Xiaomi, which is constrained by Qualcomm everywhere in the mobile phone business, invested in two chip start-ups, Sitan Technology and Zhige Technology, one after another at the beginning of this year. The former focuses on the research and development of Micro LED chips, and is expected to achieve mass production of small and medium-sized display screen chips around 2023; the latter is a well-known manufacturer of diffractive optical waveguide lenses in the industry. Besides Xiaomi, it has also received investment from OPPO and has successfully launched the market. Enter the supply chain of OPPO VR/AR equipment.

Among the listed local semiconductor companies, Rockchip, Espressif, Broadcom Integration, Allwinner, Jingjia, and Actions are all deploying chip R&D business in Metaverse-related industries. Rockchip’s RK3288, Torch Core Technology’s S900 and S700 have been the first to be applied in VR equipment.

Another good news is that the relevant state departments are also cooperating with the development direction of the industry and issuing a series of support policies to promote the progress of local semiconductor manufacturers.

In the government work reports of Shanghai, Wuhan, Hefei, Wuxi and other places, Metaverse occupies an important space and regards it as the core industry in the next few years. Wuhan directly stated in the report that it will build a national new-generation artificial intelligence innovation and development pilot zone and build five digital economy industrial parks such as the Xiaomi Science and Technology Park.

In a recent interview with the media, Yu Jianing, executive director of the Metaverse Industry Committee of China Mobile Communications Federation, pointed out the key point of the future development of the Metaverse – the B side.

“Whether China or other countries, the core value of developing Metaverse lies in industrial value. Digital industrialization is the means, industrial digitization is the goal, and the most critical application scenario of the Metaverse is the industrial scenario.”

Under the background that various industries are emphasizing digital transformation and industrialization upgrading, relevant departments will naturally increase their support. This is the right time and place for domestic semiconductor manufacturers.

However, there is still a big gap between the strength of the above-mentioned local semiconductor companies and the world’s top level. The industry is getting more and more crowded, the giants are paying more and more attention, and the upward channel is narrowing. If they want to break through the blockade of Qualcomm and Nvidia, there is not much time left for them.

write at the end

On May 9, the Meta offline hardware store officially opened in the California Bay Area, focusing on its VR headsets, smart glasses Stories and other products. Although the SKU of this offline store is pitiful, Meta’s thought and cost are not ambiguous at all.

Project leader Martin Gilliard said in an interview with CNET that Meta took great care in store location and space design, and also built an exclusive in-store VR experience space for customers.

“We want to make the store feel like a home or workplace, so users can intuitively feel what it’s like to use these devices at home and in the office.”

From this series of dynamics, it is not difficult to see that although the Metaverse is burning money, Meta still has no intention of giving up or weakening its firepower. With big customers like Meta behind the scenes, Qualcomm is naturally enjoying it.

After more than ten years of glory, it is inevitable that the consumer electronics industry will go into recession. Whether Qualcomm, Intel, AMD or even Nvidia, which is currently the most popular, all need to be fully prepared for the future.Grabbing the Metaverse is the common choice of these semiconductor giants.

And the local semiconductor companies that lost at the starting line and were slammed by Qualcomm in the entire consumer electronics era are now catching up with all their strength.

We just hope this time, the story ends differently.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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