Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

This year’s 618 e-commerce promotion, although it failed to save the decline of consumer electronics, has really made VR/AR manufacturers a huge profit.

Official data shows that on the first day of the 618 event, the sales of Pico VR headsets exceeded 10 million yuan (about 3,330 units), a year-on-year increase of 200% . iQIYI Qiyu VR headset sales on the first day increased 12 times year-on-year . Sales of Rokid AR glasses also increased by 634% year-on-year compared to the average daily sales in May .

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲From left to right are the 618 first-day battle reports of Rokid, Pico, and iQiyi Qiyu

Not only that, since 2022, many AR glasses manufacturers have launched their own consumer-grade AR glasses. AR glasses such as INMO Air, Thunderbird Air, Nreal Air, and Rokid Air have gradually become the main force in the domestic consumer-grade AR glasses market. At the same time, according to sources, there will be several consumer-grade VR headsets released in the second half of this year .

Despite the rising shipments of VR/AR equipment, many investors believe that upstream supply chain companies in the VR/AR track are obviously more worthy of attention than terminal manufacturers, especially the VR/AR optical track.

According to the incomplete statistics of Zhishi, in the past year, at least 10 optical manufacturers involved in the VR/AR field have obtained a new round of financing, and the investors behind them are many cross-disciplinary players such as Xiaomi and SenseTime.

Under the craze of the Metaverse, how do VR/AR optical manufacturers take advantage of the opportunity? Who is optimistic about the development of the VR/AR optical track? We aim at the optical manufacturers behind the VR/AR products to see how they lay out the Metaverse track.

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01What is the key to creating a pair of AR glasses?

“If you want to build a VR/AR device, you usually decide what optical solution to use first, otherwise the function, product form, and product price will not be determined.” An industry source in the VR/AR field revealed. . Therefore, optics is one of the vital components of VR/AR devices.

So, what are the key optical components in a VR/AR device? Since VR equipment and AR equipment use different types of optical solutions, we need to discuss them separately.

According to sources, the optical module is one of the most important optical components in AR equipment .

The optical modules of AR equipment are mainly divided into two parts: microdisplays and optical lenses. In simple terms, a microdisplay can display a screen of a certain size. Through optical lenses, these images will be magnified and presented in front of the user’s eyes.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲The red area in the picture is the microdisplay, and the yellow area is the optical lens

As there are different types of AR glasses on the market today, different optical schemes are used. Therefore, the way the microdisplays and optical modules are laid out will also vary .

Some AR glasses that use the free-form Birdbath optical solution often use an arrangement of microdisplays and optical modules like the above picture. And some AR glasses that use diffractive optical waveguides may have microdisplays hidden in the side frames.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲OPPO Air Glass adopts diffractive optical waveguide scheme

Which optical solution to use? Whose optical lens do you use? Whose microdisplay is used?

These problems are presented to VR/AR terminal manufacturers one by one. Due to different needs, manufacturers will also choose different solutions.

Like Xiaomi, in its AR glasses, the Xiaomi Smart Glasses Discovery Edition uses microdisplays from Sunny Optical, and the optical lenses use optical waveguide lenses from the British manufacturer WaveOptics.

OPPO uses a self-developed microdisplay on OPPO Air Glass, and at the same time chooses a diffractive optical waveguide lens from Zhige Technology , a domestic AR optical manufacturer.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲ Zhige Technology’s AR diffractive optical waveguide

In VR equipment, the most critical optical components are also optical lenses .

Meta Quest 2, Pico Neo 3, iQiyi Qiyu 3 and other VR headsets all use Fresnel lenses, while some low-end VR/AR devices use aspheric lenses or LCD lenses.

Compared with other lenses, the biggest advantage of Fresnel lenses is that they are thin and light, which can reduce the weight of the headset to a certain extent. At the same time, it can also achieve a larger field of view, so it is very popular among manufacturers.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲The difference in design between Fresnel lenses and ordinary lenses

“Most of the Fresnel lenses on the market are currently provided by Chinese companies.” An industry source told Zhishi, “In the field of Fresnel lenses, the quality of domestic products is no worse than that of foreign countries.”

It is reported that Goertek is the main supplier of Fresnel lenses for the Meta VR headset Quest 2. Meanwhile, Taiwan-based Yangming Optoelectronics and Yujing Optoelectronics may also be among the potential optical suppliers of Fresnel lenses for Apple’s MR headsets, according to reports.

We can see that, whether choosing an optical module for a pair of AR glasses or choosing the right optical lens for a VR headset, optical components are critical to a new headset design.

02The demand for VR/AR optical modules has increased, and the optical manufacturer’s card position war has started!

On the one hand, the Metaverse track is heating up, and more and more terminal manufacturers plan to launch their own VR/AR devices.On the other hand, the shipments of some headset players who have been rooted in the VR/AR industry for many years are also increasing significantly. These phenomena have resulted in an increase in the market demand for VR/AR optical modules.

This is a new opportunity for many optical startups focusing on the VR/AR track. At the same time, many optical players who focus on other fields have also followed suit and have launched optical modules for VR/AR devices.

In this regard, an optical manufacturer card position battle against the Metaverse started!

On June 16, Shanghai Jade Bird Display, a Micro LED microdisplay manufacturer, announced that they have been able to mass produce 500,000 nits of super high-brightness red Micro LED microdisplays.

This 0.13-inch red light chip has a 4-micron pixel size and a 2-micron Micro LED light-emitting point. The chip can generate 500,000 nits of high-brightness display through a microamp drive current.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲Real shot of red light chip lighting

On May 7, Guangfeng Technology, a leading laser display company , announced the first commercial AR optical module with a PPI exceeding 10,000. This optical film group can have a resolution of 720 in a volume of 0.5 cubic centimeters, and can maintain power consumption below 200mW.

It is reported that under the same volume, the image clarity of the optical module is more than double the industry average.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲Appotronics SPD technology AR optical module rendering

Previously, Zhige Technology has also launched the SIDW33 optical module, the energy utilization rate is higher than 220nit/lm.According to the official introduction, the AR hardware launched by AR glasses manufacturer Gudong Technology can last 4 to 6 times longer than other optical display solutions.

The brightness of the microdisplay, the light efficiency utilization rate of the optical module and the battery life, optical startups have created different optical modules with their own advantages for manufacturers to choose.

At the same time, many optical manufacturers who originally used other types of consumer electronics as their main business also quietly glimpsed the potential opportunities of this track, trying to get a share of it.

The domestic optical start-up company Weirui Optics plans to set up a national R&D, production and sales headquarters. It will invest about 200 million yuan in the next five years and increase the investment of about 70 million yuan in fixed assets to expand production capacity.

Oufeiguang announced the establishment of the Metaverse Division in April this year, which is responsible for optical lenses, imaging modules, opto-mechanical modules and complete machine assembly and manufacturing in the VR/AR field, accelerating the deployment of the VR/AR field.

In addition, according to the latest news, OFILM has a number of VR/AR projects under fixed-point development, and some projects have been successfully mass-produced. Customers and partners include well-known domestic and foreign manufacturers.

Not only that, Goertek shares , which had already taken the lead in this track , is also expanding its production capacity advantage.Goertek recently issued an announcement that it plans to subscribe for the new equity of Beijing Yuguang Technology Development Co., Ltd. with its own funds of 200 million yuan. And this Yuguang Technology is a company with R&D and design of micro-nano optical devices, which can provide core micro-nano optical devices for application scenarios such as AR glasses.

Recruiting recruits, expanding production lines, and continuously launching new products, we see that on the eve of the VR/AR track hardware outbreak, optical manufacturers have launched a round of battle in the upstream supply chain, trying to prepare for the Metaverse in this battle. prevail in the battle.

03 Invest in 10 optical manufacturer giants a year, capital is optimistic about the VR/AR optical track

In the first half of this year, AR glasses and VR headsets have been launched one after another, and more and more capital has also paid attention to the potential investment space of optical manufacturers.

According to the incomplete statistics of Zhishi, in the past year alone, 10 domestic VR/AR optical manufacturers have won the favor of capital. In foreign countries, social software giant Snapchat acquired British optical manufacturer WaveOptics for $500 million, setting a record for the highest acquisition amount in the optical field so far this year.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲Investment and financing of domestic optical manufacturers involved in the VR/AR field in the past year

From this investment list, we can see that some of the technology giants and Internet giants we mentioned earlier have basically made arrangements in the upstream supply chain in the VR/AR field – the optical field. And some start-up companies have also chosen to firmly hold the optical R&D technology in their own hands to ensure the stability of the supply chain.

Why are optical giants and Internet giants so optimistic about the development of VR/AR optical manufacturers? Why are VR/AR optical manufacturers actively preparing for the Metaverse?

On the one hand, if the Metaverse can become the main direction of the next-generation Internet, then VR/AR hardware, as one of the entrances to the Metaverse, will have a considerable market size.

International research firm IDC predicts that global AR/VR headset shipments will reach 11.2 million units in 2021, a year-on-year increase of 92.1%. By 2026, China’s AR/VR market will exceed $13 billion.

Recruiting troops, expanding production and promoting new products, optical manufacturers are secretly fighting the Metaverse

▲IDC predicts the global VR/AR equipment market size

At the same time, corresponding to the rapid growth in the market size of VR/AR equipment, the growth rate of the smartphone market is declining. According to data released by the China Academy of Information and Communications Technology, domestic mobile phone shipments plunged by 40% year-on-year in March, and compared with the first quarter of 2020, shipments fell by about 30% year-on-year.

The peak of the mobile phone market has also made optical manufacturers who used to focus on mobile phones as their main business actively look for new ways out. Players who may have focused more on business scenarios in the field of new energy vehicles and security are now optimistic about the development of the VR/AR field, trying to use this as a new economic growth curve.

On the other hand, since the development of VR/AR is still at a relatively early stage, the overall market structure has not yet been formed.

Many start-ups in the optical field have the opportunity to overtake on curves, and for many terminal manufacturers, this also determines their development in the next 3-5 years.

It is worth noting that although more and more optical players are investing in the VR/AR track, according to Zhishi, the demand for optical modules in the overall VR/AR market currently exceeds supply. Therefore, the rapidly expanding production line and the influx of new players are also a new round of challenges for VR/AR optical manufacturers.

04 Conclusion: Will the Metaverse be the second growth curve for optical manufacturers?

With the release of new VR/AR headsets in 2022, the VR/AR track is becoming more and more popular. Optical players hidden behind the VR/AR track are gradually being seen by more and more people. At the same time, optical manufacturers in different fields are gradually seeing the potential blue ocean market in this field and are transforming in this direction.

However, it should be noted that the current market scale in the VR/AR field is still small, and many VR/AR devices belong to the first generation of manufacturers to test the water, and have not done large-scale expansion. Judging from the existing market size, the market for optical components in the VR/AR field is in a state of oversupply.

When consumer-grade VR/AR devices fully explode, who will be the biggest winner in the domestic VR/AR field? What dark horses will be killed? We will wait and see.

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