AR/VR Chip Market Trends

Growth Drivers

• Growing adoption across various industries – Numerous industries, including civil aviation, defense & security, healthcare, digital manufacturing, education, and entertainment, heavily rely on augmented and virtual reality solutions. It is anticipated that leading companies in the augmented and virtual reality space will focus on launching sector-specific products to increase their visibility in various sectors, including transportation, mining, and oil & gas.
  
  The industries of business, education, healthcare, and entertainment are where AR/VR technology is becoming increasingly popular. The AR/VR chip market is predicted to develop as specialized chips become more in demand due to the expanding applications of AR and VR across many industries.
• Increased integration of AI in AR/VR technologies – The advancement of AR and VR technology has been greatly aided by the development of artificial intelligence (AI). In AR and VR devices, AI algorithms are employed to enhance the precision and velocity of tracking, rendering, and processing. For instance, in 2023, In addition to introducing several new products, including the new Meta X Ray-Ban smart glasses, the next version of Meta Quest, and AI assistants for WhatsApp, Facebook, and Instagram, Meta has also revealed its intentions to integrate AI with AR and VR.
  
  More accurate and lifelike virtual environments have been created as a result of the application of AI in AR and VR devices. For more immersive analytics, user movements are tracked and analyzed by AI systems. As a result, the integration of AI has enhanced the experience of AR/VR technologies which is contributing to the increasing demand in AR/VR chips market.
   
• Surge in the demand for AR/VR technologies in smartphones – The growing usage of smartphones has augmented the AR/VR chips market. According to the World Economic Forum, in 2022, there were more than 8.58 billion active mobile subscribers globally, out of a total population of 7.95 billion. AR/VR chips embedded in smartphones enable very realistic virtual and augmented reality game experiences where the user interacts with his/her surroundings. More than ever, businesses are utilizing mobile augmented reality, particularly for activities like product visualization, training, and remote assistance.

Challenges

• Lack of Awareness in Developing Nations – Developing nations, particularly those in Africa, lack the technological know-how and infrastructure to utilize augmented and virtual reality technologies. Still, they are unable to proceed due to insufficient infrastructure. In some countries, the cost of the equipment is still prohibitive, which deters people from using the technology and limits market growth.
   
• Paucity of Investments in R&D Activities – Because technology is advancing so quickly, companies need to make R&D investments to stay ahead of the competition and produce cutting-edge AR/VR chip solutions. On the other hand, certain companies' underfunding of research and development could limit the advancement of innovative AR/VR chips and limit the market's potential for growth.