The reduction of costs and enhancement of user experience are crucial directions for the improvement of VR/AR hardware products. To achieve this, manufacturers are actively experimenting with various display technologies to create realistic, immersive, and comfortable visual experiences, leading to a vibrant VR/AR display panel market. BOE plans to invest 29 billion yuan to construct a sixth-generation semiconductor display device production line, primarily producing high-end display products such as VR displays. TCL Huaxing has released a 2.1-inch 1512 PPI LCD-VR screen, achieving the highest pixel density available for mass production globally.
Currently, LCD displays still dominate the VR/AR market, while silicon-based OLED (Micro OLED) and AMOLED each have their advantages and certain potential. It remains to be seen who will dominate the VR/AR display screen market in the future.
The VR/AR terminal market drives micro-display growth
Recently, there have been frequent movements in the VR/AR terminal market. In July, Skyworth launched the world’s first consumer-grade 6DOF ultra-short throw PANCAKE1 series VR all-in-one machine, directly enhancing user wearability and usage duration. In August, Nreal officially launched two AR glasses, Nreal X and Nreal Air, with Nreal Air featuring a new generation Micro OLED screen that achieves high clarity, high contrast, and low distortion, providing a realistic AR visual experience. In September, ByteDance’s VR brand PICO launched a new series of VR all-in-one products, PICO4, equipped with a 4K+ level super-visual screen, with a pixel density of 1200 PPI and a refresh rate of 90 Hz. In October, Thunderbird released the new generation consumer-grade XR glasses, Thunderbird Air 1S, using the MicroOLED technology solution.
Research firm Strategy Analytics predicts that by 2024, the market stock of VR/AR hardware devices will double from the current 50 million units to 100 million units. David MacQueen, Executive Director of Strategy Analytics, stated that reaching a market stock of 100 million units by 2024 will be an important milestone for the development of VR/AR hardware devices, helping to drive investment and sales growth in this category. In terms of specific product categories, AR hardware devices have significant growth potential. Although VR headsets currently hold the vast majority of the VR/AR hardware market, AR hardware devices mainly serve enterprise customers, with AR device shipments accounting for only about 1% of the VR/AR market in 2021. As more consumer-grade AR devices are launched, the proportion of AR devices will increase significantly, expected to rise to 64% by 2027.
With the increase in shipments of VR/AR hardware devices, the market scale of VR display panels is rapidly growing. Omdia’s senior research analyst Lin Lin stated that the shipment volume of display panels for near-eye display applications is expected to reach 25.3 million pieces in 2022, a year-on-year increase of 73.8%, and is expected to reach 139 million pieces by 2028.
The mainstream position of LCD displays remains unshaken
Recently, the Ministry of Industry and Information Technology, the Ministry of Education, the Ministry of Culture and Tourism, the National Radio and Television Administration, and the General Administration of Sport of China jointly issued the “Action Plan for the Integration and Development of Virtual Reality and Industry Applications (2022-2026)”, which emphasizes the promotion of Micro LED and other micro-display technology upgrades. Near-eye display technology will focus on upgrading Fast-LCD, silicon-based OLED, Micro LED, and other micro-display technologies, developing high-performance free-form surfaces, BirdBath optical modules, array and diffraction waveguides, conducting research and development in forward-looking fields such as convergence adjustment conflict mitigation and light field display, and accelerating the development of near-eye displays towards high resolution, large field of view, and lightweight miniaturization.
From the current application situation of the VR market, most VR headsets use LCD screens, but the technology is constantly innovating to solve issues like low resolution screen door effect and achieve fast response and high refresh rates, improving motion blur delay issues, and making the visual quality of VR products smoother and more delicate.
According to reports, manufacturers like Oculus, Pico, HTC, and Skyworth have all adopted LCD screens in their VR products, including Oculus Quest2, HTC Vive, and Pico Neo3 and PANCAKE1 models. Notably, both the Oculus Quest2 and HTC Vive, which are hot-selling products, have abandoned the OLED screens used in the first generation in favor of LCD.
Taking the recently released Skyworth PANCAKE1 as an example, it uses the TCL Huaxing 2.1-inch 1512 PPI LCD-VR screen, achieving the highest pixel density available for mass production globally, and the Fast LCD technology also offers advantages such as fast response and no delay, providing consumers with a better visual and interactive experience.
According to TCL Huaxing, the company has successively configured the industry’s advanced 68S exposure machines and collaborated with equipment manufacturers to develop various specialized devices, continuously working for more than three months to finally achieve improved yield rates. Additionally, TCL Huaxing has established a module VR line, including an intelligent defect detection system, which supports the 1512 PPI LCD-VR screen to reach optimal performance.
As consumer demand for near-eye displays continues to rise, Mini LED backlight Fast-LCD has become an important technological direction. Geng Yi, director of the Optoelectronic Research Room at the IC Research Institute of CCID Consulting, stated that the combination of Fast-LCD and Mini LED can not only effectively solve the problem of light leakage but also further enhance the performance of Fast-LCD in terms of high contrast, high refresh rate, and high brightness, coupled with HDR functionality, better meeting the requirements for ultra-clear and delicate image quality in VR products.
Industry insiders predict that in the VR field, Fast-LCD, aided by Mini LED backlight technology, will occupy a large portion of the application market, with a share potentially exceeding 85%.
Silicon-based OLED gradually emerges
Although LCD technology remains mainstream, it also has drawbacks such as darker colors compared to OLED screens, less vibrant colors than OLED, thicker screens that cannot be bent, backlight layers prone to display leakage, and longer screen response times. Meanwhile, other display technologies like AMOLED and silicon-based OLED are also continuously developing.
AMOLED technology was previously used in Sony’s PlayStation VR2, with its AMOLED panel’s pixel density far exceeding 800 PPI, boasting high contrast display effects and improved PPD (Pixels Per Degree) eliminating the screen door effect. However, in the past two years, AMOLED has been absent from VR headsets due to its pixel density being unable to compete with the current generation of high-resolution LCD panels and slow response times leading to poor user experience. Samsung Display showcased VR OLED panels of 806 PPI and 1200 PPI in 2018, but due to a lack of large orders, mass production could not be achieved.
Silicon-based OLED is gradually emerging. Silicon-based OLEDs are small area vapor-deposited on 6-inch and 8-inch wafers, overcoming the uniformity issue in OLED production. Reports indicate that both Samsung Display and LG Display are developing silicon-based OLED technology. Liu Yushi, a senior analyst at CINNOResearch, stated in an interview with China Electronics News that VR products require high pixel density, and AMOLED is limited by FMM precision constraints, making it difficult to produce very high pixel densities at a higher cost. Silicon-based OLED shows excellent brightness and pixel density performance, but on one hand, large-area silicon substrates are costly, and on the other hand, using smaller silicon chips requires more complex optical designs, thus remaining relatively expensive, primarily used for high-end VR products. As technology and market develop, silicon-based OLEDs will inevitably see an explosion in growth while meeting cost competitiveness.
CINNO Research data shows that the global market size for AR/VR silicon-based OLED display panels was $170 million in 2021, and with the development of the VR/AR industry and further penetration of silicon-based OLED technology, it is expected to reach $1.67 billion by 2025, with a compound annual growth rate of 77.1% from 2021 to 2025.
Recently, BOE stated in response to investor inquiries that the display solutions it provides for VR/AR/MR smart terminals include representative display technologies such as high PPI, high refresh rate Fast-LCD and ultra-high resolution, ultra-high contrast silicon-based OLED. Companies like OLED, Visionox’s Kunshan Dream Display, Xitai Technology, and Hefei Shiya have all entered the silicon-based OLED field, with production line investments exceeding 10 billion yuan.
Industry insiders believe that the two technological routes of Fast-LCD and silicon-based OLED will become two important tracks in the AR/VR headset field.
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November 30 to December 1
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Author: Lu Mengqi
Editor: Wu Liling
Art Editor: Maria
Supervisor: Lian Xiaodong
