AR/VR Chip Market size was valued at USD 5 Billion in 2023 and is poised to reach USD 83 Billion by the end of 2036, registering around 25% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of AR/VR chip is assessed at USD 6.2 Billion.
The AR/VR chip market is led by the increasing demand for gaming experiences proliferation of augmented reality and virtual reality applications. According to the International Trade Administration, sales have increased as a result of the pandemic; in the United States, consumer spending on video games and subscription services has increased by a record 31%. The income generated by mobile gaming increased by 13.3% in 2020 to USD 77.2 billion.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
25% |
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Base Year Market Size (2023) |
USD 5 Billion |
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Forecast Year Market Size (2036) |
USD 83 Billion |
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Regional Scope |
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Chip Type (Processor ICs, User Interface ICs, Power Management IC)
Processor ICs segment in the AR/VR chip market is set to observe more than 24% growth through 2036. The segment growth can be attributed to the advanced features provided by these circuits. Processor-integrated circuits are typically less expensive and energy-intensive than microprocessors. They are used in autonomously operating goods and devices such as embedded systems, medical devices implanted in the body, remote controls, smart appliances, and automotive engine control systems.
Additionally, processor-integrated circuits (ICs) are essential for data processing and perform intricate calculations to guarantee seamless AR and VR experiences. By converting inputs into commands, user interface integrated circuits (ICs) allow users and AR/VR devices to communicate seamlessly.
Furthermore, smaller microcontrollers translate into cheaper system expenses. Because all the necessary parts—memory, a central processing unit (CPU), and input/output peripherals—can be found on a single chip, cutting prices and boosting efficiency, the market is booming globally.
Device Type (Head-mounted Display, Head-up Display, Handheld Device, Gesture Tracking Device, Projector and Display Wall)
Head-mounted display segment in the AR/VR chip market is poised to exceed USD 7 Billion by 2024. The segment growth can be credited to the growing adoption of head-mounted displays in military use. Also, consumers now prioritize devices that are not only comfortable but easy to carry. Therefore, the rising demand for lightweight and portable devices is influencing the growth of the segment.
Head-mounted display (HMD) augmented reality (AR) has gained more and more interest in manufacturing activities, as it enables operators to obtain visual assistance in front of their view directly while freeing human’s two hands. According to the United Nations Industrial Development Organization, after declining by 4.2% in 2020 due to the pandemic, global manufacturing production climbed by 9.4% in 2021. Therefore, the growth in manufacturing output is boosting the head-mounted display segment growth.
Our in-depth analysis of the global market includes the following segments:
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Chip Type |
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Device Type |
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End-use |
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APAC Market Statistics
By 2036, Asia Pacific AR/VR chip market is anticipated to exceed USD 36 Billion. The market growth in the region is also expected on account of the growing use of virtual reality technology for consumer online learning, medical care, and training. Furthermore, it is noteworthy that countries such as India are poised to implement novel technologies across many industries, implying that the market in the Asia Pacific region will expand at a faster pace during the forecast year. The adoption of contemporary technology by numerous industries, including government, digital logistics, residential and commercial, and transportation, has led to the region's growth.
China's economy is among the fastest-growing in the world. There are a lot of ongoing projects in the nation, particularly VR projects. According to the Ministry of Commerce, People’s Republic of China, in 2022 a strategy was accelerated for the VR industry's growth, to increase its value to more than USD 49.4 billion by 2026. China has been emphasizing more and more the transition of its economy from one centered on manufacturing to one centered on innovation.
The manufacturing industry has been a major source of dependence for South Korea. With significant investments in technology, South Korea is seeing exciting developments in the AR and VR chip industry. It has created an AR supermarket chain that operates on metro platforms. According to the World Economic Forum, Seoul, the dynamic metropolis of South Korea, has introduced the world's first urban metaverse app, marking a groundbreaking move into the digital sphere. With Phase 2 beginning in 2024 and Phase 3 beginning in 2026, the city has committed USD 180 million to building its metaverse infrastructure. Phase 2 will connect local firms with foreign investors, and Phase 3 will incorporate augmented and virtual reality into the city's everyday operations.
North America Market Analysis
North America AR/VR chip market is set to hold revenue share of over 26% by the end of 2036, owing to the increasing demand for consumer electronic devices in the region. Users can use a digital platform to explore the game world with AR and VR. AR/VR chip use in consumer electronics devices is increasing due to the fiercely competitive consumer electronics sector, where manufacturers prioritize updating their products like laptops, cellphones, and digital recorders. Furthermore, to keep up with this trend, big companies like Sony, Apple, Samsung, Panasonic, and Google, among others, implement cutting-edge augmented technologies.
The growing demand for head mounted displays in the military and defense sectors is propelling the market growth of the market in the US. Also, the growing need for lightweight helmets is also fueling the market demand in the region. For instance, in April 2024, a leading provider of smart glasses and Augmented Reality (AR) technology and products, Vuzix Corporation announced it had received new additional orders from two aerospace and defense firms to further develop and deliver waveguide-based display solutions in 2024.
The AR/VR Chip market is dominated by significant competitors that are expanding through mergers and acquisitions.
Author Credits: Abhishek Verma
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