The next battlefield for the Metaverse headset for display technology: Report

Flat screens and smartphones have been the battleground for display advancements over the past few years. But the rapid growth of augmented reality and virtual reality (AR/VR) is leading to a similar boom in supply and demand technologies for the screens used in these headsets, according to marketing research firm Display Supply Chain Consultants.

The company notes that annual revenue from AR/VR displays will reach $9.3 billion in 2027, in an updated forecast published in midyear Augmented and Virtual Reality Display Technologies and Market Report. This represents a compound annual growth rate (CAGR) of 58.8%.

“A lot has happened in one year, including several high-profile acquisitions and the rebranding of Facebook to Meta,” says Guillaume Chansin, director of display research at DSCC and lead author of the report. “Given expected shipment growth for 2022 and 2023, we have decided to refine our long-term view to better reflect the current trajectory.”

DSCC still expects that VR and AR pass-through will generate more shipments and show revenue compared to smooth augmented reality. Meta has added some AR passthrough support on the Quest 2 and more headphones will offer this feature in the near future.

Image source: Display Supply Chain Consultantsdsccarvr.png

View revenue by headphone type.

DSCC expects 2022 to be a pivotal year for AR/VR as display panel shipments are expected to grow at a double rate. Much of the growth will be in LCD (liquid crystal display) technology, which is currently used in most VR headsets, such as the Meta Quest 2 or Pico Neo 3 Link.

So far, LCD technology is the leading candidate for designing AR/VR displays. This technology can achieve a high pixel density of more than 1000dpi. Additionally, LCD screens allow for a short duty cycle, with backlighting only about 10% of the time. For VR, this helps reduce motion blur and associated motion sickness that some users may experience.

According to DSCC, future LCD screens for VR headsets will increasingly use MiniLED backlighting to improve contrast. The company indicated that Meta is expected to release a new VR headset with two MiniLED LCD panels later this year. LCD panels will have pancake optics that are lighter and smaller than the typical Fresnel lenses found in most headphones today.

The competing technology in AR/VR headsets is AMOLED (Active Organic Light Emitting Diode). But due to its limited pixel density of 615ppi, AMOLED hasn’t been built into VR headsets over the past two years as design engineers have moved to higher-resolution LCD panels, DSCC said.

But AMOLED screens are not dead. DSCC expects an AMOLED screen with a pixel density of over 800ppi to debut on Sony’s PlayStation VR2. In addition, research is underway into micro OLED technology, which can produce a pixel density exceeding 2,000 ppi.

Micro OLED technology is used in the AR/VR headsets that Apple plans to release. SiOLED has also been adopted in smart viewers using optical birdbath integrator devices, such as the Nreal Light or Lenovo ThinkReality A3.

According to DSCC, the main challenges facing SiOLED are increasing brightness and reducing costs. There has been significant investment in China to increase capacity. eMagin showed 10,000 nits on a color SiOLED display. DSCC expects SiOLED to account for 48% of all AR/VR screen shipments by 2027.

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