TrendForce reports that the recently unveiled Apple Vision Pro at this year’s WWDC is poised to revolutionize the AR/VR market with its sleek design and high-performance capabilities. However, the complexity behind its production and its limited production capacity present significant challenges, leading to a projected initial release in the US during 1H24. Furthermore, considering factors such as pricing and the absence of certain essential features, TrendForce anticipates a modest shipment volume of approximately 200,000 units for Apple Vision Pro in 2024. The market’s response will heavily depend on the subsequent introduction of consumer-oriented Apple Vision models and the ability of Apple to offer enticing everyday functionalities that will drive the rapid growth of the AR market as a whole.

TrendForce also notes that the Apple Vision Pro boasts cutting-edge hardware specifications and innovative design. However, a substantial price tag of US$3,499 and the requirement for an external power source to operate for a mere two hours pose challenges to consumer adoption. Currently, the Apple Vision Pro lacks sufficient applications for mainstream users, making it more attractive to developers and enterprise customers who can capitalize on its innovative features to create diverse applications. Consequently, the higher price point of the product is justified.

Looking ahead, Apple has the opportunity to fine-tune the product specifications based on the usage patterns of various features in Vision Pro. This will pave the way for the launch of a distinct offering, Apple Vision, which will cater to the budgetary constraints of general consumers while optimizing battery life. As such, WWDC 2023 primarily focuses on the concept of spatial computing, setting the stage for the anticipation of more practical AR applications to be showcased at WWDC 2024. These applications will be tailored towards usage in daily life, including seamless integration with other Apple products for information retrieval and effortless command execution.

Will AIGC Bring New Development Boost to MR?

According to TrendForce, it is difficult to see AIGC exerting influence in the MR field in the short term due to the need for corresponding AI models and tools to be established. Currently, the AR/VR market is not large, and coupled with the complexity of content development, it is challenging to attract AIGC’s development in this area in the short term.

Furthermore, the complexity and cost of entry into the MR field, along with limited market size, have caused many brand manufacturers to focus on small-scale commercial products. This is because such products have a high unit price and low quantity, allowing manufacturers to control the total cost within a manageable range while capitalizing on the AR/VR industry trend. However, it does not mean that manufacturers are willing to heavily invest in this market.

Overall, this is the biggest difference in strategy between Apple and these manufacturers. Apple indeed wants to aggressively develop the AR market, but the lack of market understanding and content applications led to the introduction of developer products like Vision Pro. The purpose is twofold: to allow developers to advance in content application development and to gather feedback on hardware design and features used by developers. This feedback helps Apple determine which hardware design and features to retain or discard when launching new consumer products that closely align with content application needs.

Apple’s plan to release the first Apple Watch with a Micro LED display in 2024 has reportedly been delayed until the second half of 2025 or later due to production challenges. However, this delay shows Apple’s cautious approach to technology and evaluation. This delay shows Apple’s prudence and assessment of technology, but it also brings new opportunities for Ennostar, which was previously considered only a second supplier

According to market research firm DSCC’s, the new Apple Watch will initially adopt Osram’s Micro LED chips, and Epistar(under Ennostar), will be responsible for shipping related components. However, some insiders have revealed that Osram’s technology produces Vertical Chips, which are different from Epistar’s technology and are unlikely to be used in the same project simultaneously.

Epistar’s current chip technology is Flip Chips, Ennostar has stated that American brands are currently collaborating with European suppliers, and Epistar “may have a chance” to be the second supplier, however, ‘the second supplier” may not have a chance to join the cast until 2026.

DSCC mentioned that Epistar is responsible for shipping related components, which differs from what Ennostar said “second supplier”. Technically speaking, Ennostar is more likely to be a “parallel competitor” to Osram since the process of Vertical Chips versus Flip Chips are not on the same technical base. From this perspective, obviously, Apple has dual strategies on Micro LED from adopting Osram’s Vertical Chips as the core and maintaining the technical connections with Taiwanese manufacturers at the same time, which Ennostar may have a shot to ramp up to the main supplier again to take off the “second source” label.

Does the Micro LED process hint at Apple’s product line planning?

Micro LED chips now are mainly categorized into Vertical, Lateral, and Flip chips. According to industry insiders, Osram began developing Micro LED in 2019 but only focused on vertical chips due to patent issues. Currently, only 3 companies in the world have patents for Vertical Chips, and Osram is likely to gain a competitive advantage in Micro LED through these patents. As a result, the company is targeting the development of watches, phones, and AR glasses, and has been collaborating with Apple on watch projects in Germany since 2019. The size of the watch chip produced in collaboration with Apple is approximately 8um.

Meanwhile, Osram announced in 2021 that it is expanding its LED factory in Kulim, Malaysia with an investment of approximately $850 million, and plans to produce Mini LED and Micro LED chips in its 8-inch factory, with mass production expected in 2024. The company also mentioned last year that it plans to produce small-sized products by 2024, and this small-sized product is very likely to be Apple’s Apple Watch.

As for companies such as PlayNitride, Epistar, and Chinese manufacturers that are working on Micro LED technology, they are all using flip chips. PlayNitride stated that they have the opportunity to produce Lateral Chips as client’s request, and Vertical Chips may be produced for AR and VR in the future. “It still depends on the customer’s application to determine what kind of chips matches their products, e.g. Vertical Chips can bring higher PPI with a smaller size of chips.” PlayNitirde said.

Due to differences in the position of electrodes among Vertical chips, Lateral chips, and Flip Chips, give their own pros and cons in each production process. The advantage of Vertical Chips is that they can be made smaller, and the yield rate is higher as the size gets smaller. However, it is difficult to test and repair them once all the Micro LEDs are arranged and connected for testing, so the yield rate may decrease during the bonding process.

Vertical Chips are now suitable for use in the fields of watches, smartphones, and AR glasses, while Lateral Chips are used for other applications like automotive or large displays. However, AUO plans to produce Micro LED watches using Flip Chips, showing that different technologies can still be applied to similar products. In the future, using Vertical Chips may be necessary for developing AR glasses, which may explain why Apple is using this technology in its Apple Watch.

With the dawn of the era of Micro LED mass production, what will be Apple’s strategy?

Apple’s influence in display technology development affects other brands’ adoption attitudes. To reduce risks, Apple is not taking sides as different technologies and processes are involved, which may pose challenges to transfer technology or backplane technology, affecting the entire Micro LED supply chain. For the next generation Apple Watch, Apple is mainly working with Osram for Vertical MicroLED Chips, but may also collaborate with Taiwanese companies on Lateral or Flip Chips in the future.（Image credit: TechNews）

As we look at the global economic growth rates for 2022, one country’s GDP performance stands out: Vietnam. According to the International Monetary Fund (IMF), Vietnam’s estimated GDP growth rate for 2022 is 7%, compared to 2.6% in 2021, making it the most fast-growing country among the neighbouring countries.

Undoubtedly, the country’s impressive performance is largely due to the global supply chain’s migration to the country, driven by the COVID-19 pandemic and the trade war between the US and China.

Pandemic and Trade War as Catalysts for Supply Chain Relocation

Long before the supply chain’s recent move, Samsung had already made aggressive investments by allocating 60% of Samsung Galaxy phones’ production in Vietnam. As a result of that, Vietnam’s electronics manufacturing exports surpassed its largest industry, textiles, a decade ago.

Over the last couple of years, the increasing tension between U.S. and China’s lockdown during the pandemic has made the leading brands aware of the high geopolitical risks as well as the importance of supply chain diversification. These concerns forced them to vigorously re-evaluate the plan to move their manufacturing factories to Vietnam, mitigating the risks they are exposed to.

Laptops: The Last Piece of Puzzle

In this migration, Apple and Dell have been the most proactive brands. After Shanghai’s lockdown, Apple has chosen Vietnam as its second-largest production base for laptops, tablets, and TWS earphones. Luxshare has already attracted attentions for building an AirPod production line in Vietnam, but not until recently, the laptop OEMs in Taiwan have geared up for expanding their investments there: a couple days ago Quanta Computer just announced a $50 million investment to establish a Vietnamese subsidiary to produce MacBooks; Foxconn, another key supplier of Apple’s macbook, is reported to begin their trial run for macbook after an $9 billion investment in 2022 for capacity increase.

On the other hand, it is said that Dell had actively reviewed its suppliers and component sources before 2022 to ensure the stable supply for their bidding market in the North American. As Dell becomes more aggressive in shifting their production lines from China to other locations, suppliers such as Compal and Wistron have also been actively building laptop assembly lines in Vietnam for the past two years.

A flexible production model is on the horizon

In the past, most OEMs considered Vietnam as a backup due to the complex logistic management potentially caused by the relocation of production lines. However, given that the most complicated and rigid laptop supply chains have begun to move, it is generally believed that this represents a solid trend where Vietnam is almost set to take over China’s position.

According to TrendForce, Vietnam is projected to account for 5% of global laptop shipments by 2023, which marks a notable increase from less than 1% just a year ago, making the country the second-largest laptop production base after China.

However, from the perspective of supply chain risk diversification, brand customers demand production models that not only reduce over-concentration in China but also enable quick response to possible contingencies at each production base.

That means even if laptop production is concentrated in China and Vietnam, if there is an urgent situation, OEM factories’ production lines in other regions must be able to provide immediate support. Such production models will inevitably reshape the supply chain landscape moving forward.

(Photo credit: Freepik)

(Source: TechNews) AUO has been developing Micro LED technology since 2012 and has accumulated profound display expertise and processing capabilities, including resources from PlayNitride and Rohinni. Using its accurate mass-transfer technology, AUO transfers Micro LED chips onto AM-TFT backplanes. AUO also collaborates with Ruida Technology and BenQ Materials to develop Micro LED display driver ICs and packaging surface treatment materials, respectively and uses its image calibration technology to enhance picture quality performance in the display industry.

AUO launched a 1.39-inch commercial smartwatch this year, breaking through technological barriers. The smartwatch has a round design conforming to smartwatch standards, with a high pixel density of up to 326 PPI, maintaining color saturation and high contrast while improving the lifespan of large viewing angles and high-brightness displays. It is energy-efficient and meets the demand for clear information display under bright sunlight, leading the way in mass production.

Upgraded smart cockpit visual effects with Micro LED transparent display

AUO uses Micro LED transparent displays to redefine in-car usage, with high brightness and contrast, along with optical films on printed glass or special structures, to present different textures and integrate with the interior decor. The A-pillar to A-pillar LED immersive display screen achieves a display-on-demand cabin experience without interfering with information reading.

AUO has integrated a 17.3-inch Micro LED transparent display with a 12.3-inch LCD display to create a no-dead-angle naked eye 3D effect. It also includes a DMS recognition system to detect driving behavior and provide safety warnings. This technology can be used in future self-driving car dashboards to create a safer and more comfortable driving experience. Additionally, AUO displayed a 60-inch Micro LED transparent window screen that can be customized for different applications such as car windows, home entrances, smart storefronts, and commercial displays, providing a rich and fascinating visual experience.（Image credit: AUO）

Sony has provided more information about the release of its PS VR2 through its official blog. According to its latest blog post about this product, the new VR headset, which is the main part of a PS VR2 bundle or package, will hit the market on February 22, 2023. The retail price of the entire bundle is now set at US$549. The bundle comprises the PS VR headset, two Sense controllers, and a set of stereo headphones. While the price of the PS VR2 is higher than that of the PS5 (i.e., US$499 for the standard PS5 and US$399 for the Digital Edition of the console), it is worth noting that the previous generation of the PS VR headset—the PS VR—priced the same as the PS4 Pro (i.e., US$399). Also, if we include two previous-generation PS VR controllers (i.e., the Move controllers) that cost US$49 each, then consumers would pay a total of US$497. Hence, the price difference between the older PS VR bundle and the PS VR2 bundle is almost US$50; and this is actually a fairly reasonable reflection of the cost of the new hardware. After all, the PS VR2 and the Sense controller incorporate quite a few new features and components such as eye-tracking and haptic feedback.

Generally speaking, Sony’s plan is not about making the PS VR2 more expensive than the latest PS console, per se, but rather about following a pricing strategy that is specific to its VR devices. It should be pointed out that for the previous generation, Sony sold the headset separately from the supporting controller. There was no bundle back then. Now, the company only sells the PS VR2 in a package deal that includes the headset and two motion controllers. Because of this change in sales strategy, consumers feel a price hike. As for the possibility of Sony selling standalone PS VR2 headsets in the future, TrendForce believes such move will be unlikely mainly because Sony is focusing on gaming experience rather than instinctively trying to raise the market penetration rate of the PS VR2.

When the PS VR was launched, the gaming experience that it provided was affected by the low market penetration rate of the PS4 Pro. Learning from this lesson, Sony has removed forward compatibility from the hardware and software designs of the PS VR2. Therefore, the combination of the PS VR2 bundle and the PS5 console is now the only way to get the most ideal VR gaming experience from Sony. And with this approach, Sony hopes to raise the market penetration rate of the PS VR as a whole. Moreover, the gaming experience for users of the PS VR2 will be mainly immersive. So, in addition to the specially designed video and audio content, the PS VR2 will also feature a wider range of operations and a greater variety of feedback mechanisms. Additionally, the game content for the PS VR2 will be designed specifically for the Sense controller. All these details again reveal a strategy that insists on a total package for consumers.

PS VR2 Shipments Are Forecasted to Reach 1.6 Million Units for 2023

While pricing will definitely affect the sales volume of the PS VR2, it is also important to remember that the game console market targets a just few particular subsections of consumers. VR gaming is thus a narrow segment within this niche market, and VR gaming devices are never going to reach the same scale in sales when compared with the more typical consumer electronic devices. Furthermore, game console users as a group tend to be willing to spend more than do most other consumers. Hence, providing a proper gaming experience is a much more effective way to grow the VR gaming market as opposed to trying to keep hardware prices down.

And for the reasons described above, we can also anticipate that the cumulative sales volume of the PS VR2 will unlikely be comparable to that of Meta’s Quest 2, which has reached the level of tens of millions. However, the PS VR2 should have no problem reaching the 5~10% market penetration rate that is already attained by the PS5. TrendForce projects that the cumulative total sales volume of the PS5 console will surpass 30 million units by the end of 2022. Considering the impact of the weakening economy on consumer spending and the lack of VR games in the initial period of adoption, some gamers will put off purchasing the PS VR2 until they believe the time is right. Still, shipments of this device are forecasted to reach 1.6 million units for 2023. The key factor that could push sales of the PS VR2 even higher is whether its games have the content that complements its hardware and thus provide an exceptionally immersive experience.

（Image credit: Pixabay）