OEMs are waiting for MicroLED-based innovations. Yole anticipates MicroLED’s penetration to reach 30% in AR headsets by 2027. A 1st generation of AR headsets to come soon with a 2021 milestone showing noticeable volume...
Augmented Reality (AR) and Virtual Reality (VR) have been hot topics for decades. VR has been around for the consumer for some years now, built upon off-the-shelf components. Apart from general improvements, the form factor is being worked upon and we see many developments in microdisplays, including OLED-on-Silicon and microLEDs, alongside pancake optics to be able to deliver a proper pixel density, field of view and form factor.
From Zine Bouhamri, Technology & Market Analyst, Displays at Yole Développement (Yole):“AR was and continues to be the dream that consumer electronics companies want to make real to deliver the long-awaited revolution of replacing smartphones. But as children of the flat panel display industry, we are used to having very high-quality displays all around us. And the image quality that AR has been able to provide so far is not yet at this level. Technology improvements such as waveguide optics and microLEDs will enable an increase in functionalities and use case developments. Without a compelling use case, the consumer will not jump into the game”.
The market research & strategy consulting company, Yole, analyzes this progress in a new dedicated display report, titled Displays and optics for AR & VR 2020. Indeed, Yole’s analysts expect a first generation of headsets to come soon, with a 2021 milestone of a noticeable volume. These will be based on conventional optics with most likely either MEMS or OLED-on-silicon display solutions. However, for the market to really be enabled, a complete technological paradigm shift is required. In terms of optics, everything revolves around waveguide technologies. For a long time they have been improving and were fighting against the poor optical efficiency they could deliver.
According to Zine Bouhamri: “From less than 1% efficiency we can now see results that go an order of magnitude beyond that. So much so that, while uniformity needs to be improved, they meet the minimum requirements for OEMs. We expect a second milestone around 2023 when the big consumer electronics brands come in with a product that respects the consumer requirement trio of performance, cost and form factor”.
But one element is still missing at the moment: the display engine. Though efforts are continuing, Yole’s analysts have not yet seen a microLED product. MicroLED microdisplays can provide what the other solutions cannot, brightness, form factor, color, and contrast. And all the OEMs are waiting for this opportunity to materialize, as Yole anticipates its penetration to reach 30% by 2027.
As it is complex to manufacture a microLED microdisplay at an acceptable cost with a proper level of performance, we can monitor the industry’s progress. Many prototypes have been shown over the past 24 months, with different manufacturing paths including red/green/blue (RGB) native colors, color conversion and hybrid bonding. In late March 2020, the Plessey and Vuzix partnership for microLEDs in AR came to an end when Facebook signed an exclusivity deal for Plessey to supply them with microLEDs. This illustrates the interest in the technology and how the supply chain is establishing itself.
In the meantime, we have seen lots of movement from the waveguiding optics perspective. In the past few years, we have seen investments and partnerships including Lumus with Quanta, Digilens with Foxconn, WaveOptics with Goertek and Apple with Akonia. Between reflective, diffractive and holographic waveguides, comes the question of who is going to get the lion’s share.
It will all come down to performance and cost. And cost is very much linked to the manufacturing paths taken by the different technologies. Surface-relief grating-based waveguides have been well-known for years now, being the choice of Microsoft or Magic Leap. But poor yields linked to a complex manufacturing process based on nano-imprint lithography led to high costs. This has been improved and now WaveOptics or Dispelix can likely provide waveguides to any OEM, moving from a captive technology towards becoming openly available.
Among Apple, Facebook, Huawei and Samsung, who shall be the first to deliver a sleek design, good performance and decent cost consumer headset? There is little to no doubt that though Apple has everything in-house, all major brands are close and establishing partnerships and deals with all the waveguide and microLED players to reach the consumer.
“The AR market has been mostly a professional-based market, as the performance, cost and form factor trio is hard to balance” says Pierrick Boulay, Technology & Market Analyst, Solid-state Lighting at Yole. “But thanks to all the technological advancements, we can expect a 105% CAGR through to 2027 in volume for AR headsets. And this promise of a strongly growing market has sparked the interest of many in the supply chain, some still in stealth mode”.
Indeed, waveguides have improved a lot thanks to design efforts but also thanks to the push from equipment makers intensifying their efforts, such as EV Group and Oxford Instruments and the substrate manufacturers. The glass industry has been working at providing high refractive index wafers to allow for waveguide manufacturing, trying to both push and enable the market. Given the projected wafer numbers and associated revenues, were the consumer market to thrive, it would represent a non-negligible portion of the glass business.
But for the consumer market to thrive, it is about more than just the hardware and providing a high-quality image in something that looks like a regular pair of glasses. If the end-result simply consists of putting a smartwatch screen in front of the eye, this is probably not compelling enough. Much like VR, there is a need for a real disruption in the use case. That is why we expect the OEMs to come in with a proper proposition to really kickstart the market. As with the history of the smartwatch, we think the adoption curve for AR will follow the same path, with the early products maybe not providing compelling performance and use case, until a big gun jumps in.
As an example, Apple seems like a good candidate for that: they have the microLED effort, the waveguide effort, the application effort with ARKit and also the 3D sensing effort. As they progressively integrate some of these technologies in their newer products, they will raise awareness about AR, preparing the consumer for when everything is ready for a headset. And perhaps that will be seen by 2023.