The “Metaverse” storm is coming! Which semiconductor companies will benefit?

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Recently, the concept of the Metaverse has become popular because it is a collection of multiple key core tracks and has become a hot topic in the technology and capital circles. So, is the detonated Metaverse a trend or a bubble?

(Image source: Interface)

Obviously, the tech giants have already rushed to the new track. The current popularity of the Metaverse is not accidental. The dividends of mobile Internet are gradually fading, and technologies such as AI, 5G, IoT, blockchain, big data, and wearable devices are becoming more mature. As a carrier for the integration of the virtual world and the real world, the Metaverse contains unlimited opportunities.

At present, there is no recognized authoritative definition of the metaverse in the scientific and technological community. Xinhua Viewpoint reported that Shen Yang, a professor at the School of Journalism and Communication of Tsinghua University, believes that the metaverse is a new type of Internet application and social form that integrates multiple new technologies and integrates the virtual and the real. It provides an immersive experience based on extended reality technology and generates a mirror image of the real world through digital twin technology. It builds an economic system through blockchain technology, closely integrates the virtual world with the real world in the economic system, social system, and identity system, and allows each user to produce and edit content.

(Photo source: Tiger Sniff)

Bloomberg data estimates that by 2024, the market opportunities related to the metaverse could reach $800 billion , and it is estimated that revenue from the virtual world could reach $400 billion by 2025, up from about $180 billion in 2021.

According to The Paper, to date, more than 400 companies in China have registered trademarks related to the Metaverse . Since Facebook announced on October 28 that it would change its company name to "Meta", the A-share Metaverse concept sector has also been rising continuously recently.

Industry insiders pointed out that VR/AR is a physical entrance to the metaverse . According to the forecast data of consulting firm IDC, between 2021 and 2025, global VR virtual reality product shipments are expected to reach an average annual growth rate of about 41.4%, and AR augmented reality product shipments are expected to reach an average annual growth rate of about 138%.

(Photo source: Gaoxinxing Technology)

As a core component, the development of semiconductors undoubtedly plays a decisive role in the rise of VR/AR products. Semiconductor practitioners said that in order to realize the application of the metaverse, AI, 5G and high-speed computing (HPC) technologies must be fully in place. Xinshiye has reviewed some related companies in the semiconductor field in the "metaverse sector".

Power Source Information

The third-quarter report disclosed by Liyuan Information showed that the company achieved a total operating revenue of 8.03 billion yuan in the first three quarters of 2021, a year-on-year decrease of 1.5%, and the decline narrowed compared with the same period last year; the net profit attributable to shareholders was 260 million yuan, a year-on-year increase of 69.5%.

Liyuan Information stated on its investor interaction platform on November 8 that the company's self-developed MCU chips can be used for the infrastructure of metaverse construction such as AR and VR.

Goertek

In the first three quarters, Goertek's revenue was 52.789 billion yuan, a year-on-year increase of 52%; net profit attributable to the parent was 3.333 billion yuan, a year-on-year increase of 65.28%. In the third quarter, both revenue and net profit rose. Goertek explained that this was mainly due to the increase in sales revenue of products such as VR virtual reality, smart wearables and smart wireless headphones, and improved profitability. Among them, in the first three quarters of 2021, Goertek's smart hardware business revenue, including VR/AR equipment, reached 22.235 billion yuan, a year-on-year increase of 119.07%.

According to a research report by Minsheng Securities, Goertek's VR industry customers cover the world's mainstream VR headset brands and have reached long-term in-depth cooperation, including Facebook, Sony, HTC and Pico, and it is the exclusive OEM for Facebook Quest2. Its mid-to-high-end VR headset shipments account for more than half of the global total.

Lens Technology

Lens Technology's revenue in the first three quarters was 33.926 billion yuan, a year-on-year increase of 30.07%; the net profit attributable to shareholders of the listed company was 3.297 billion yuan, a year-on-year decrease of 3.94%; the revenue in the third quarter was 12.535 billion yuan, a year-on-year increase of 19.21%; the net profit attributable to shareholders of the listed company was 989 million yuan, a year-on-year decrease of 34.97%.

Lens Technology said on its investor interaction platform on November 8 that it has laid out the R&D, design, production and customer resources of metaverse concept products. The company will continue to develop new technologies and equipment, develop new products and businesses, and expand new customers based on industry development trends and downstream customer needs.

Gao Xinxing

In the first three quarters of 2021, Gaoxinxing achieved a total operating revenue of 1.57 billion yuan, a year-on-year increase of 7.2%; and achieved a net profit attributable to shareholders of 24.555 million yuan, compared with -120 million yuan in the same period last year, turning losses into profits year-on-year.

In 2014, Gosuncn Technology Group released the "AR augmented reality" network camera, opening a new era of real-life video maps. After several years of innovation, Gosuncn's AR technology has now developed from AR1.0 to AR4.0, which can seamlessly integrate video and various map resources, symbolizing the arrival of the era of "one map" for three-dimensional real scenes.

OFILM

The performance report for the first three quarters of 2021 disclosed by OFILM showed that the company achieved operating income of 17.198 billion yuan during the reporting period, a year-on-year decrease of 53.59%; the net loss was 40.3871 million yuan, while the net profit in the same period last year was 739 million yuan.

O-Film previously stated that the company is actively expanding new businesses while developing its core businesses, and has laid out new optical and optoelectronic businesses in VR/AR, industrial, medical, sports cameras and other new fields, striving to develop incremental businesses through the development of new technologies and new products, thereby promoting the company's long-term and healthy development. At present, the company has carried out extensive cooperation with many domestic mainstream brand customers in various fields of new businesses. In the next five years, O-Film will forge ahead in new businesses such as smart cars, VR/AR, and significantly increase the proportion of new business revenue, making it a new growth driver for the company.

Changxin Technology

In the first three quarters of 2021, Changxin Technology achieved a total operating revenue of 5.08 billion yuan, a year-on-year increase of 1.8%; and achieved a net profit attributable to shareholders of the parent company of 800 million yuan, a year-on-year increase of 0.4%.

Changxin Technology recently stated on an interactive platform that the company has been committed to the construction of the "Metaverse" industrial chain, providing Facebook with the latest VR Quest2 display module, and also providing VR headset modules for domestic VR giants.

Liad

Leyard released its third-quarter performance announcement, stating that its total operating revenue in the first three quarters of 2021 was 5.834 billion yuan, a year-on-year increase of 30.03%; and its net profit attributable to shareholders was 521 million yuan, a year-on-year increase of 65.09%.

Leyard recently stated on an interactive platform that the optical motion capture technology and products of Natural Point, a company in which the company owns 100% of the shares, can be used in virtual reality including related scenarios of the metaverse.

Lianchuang Electronics

Lianchuang Electronics' third quarterly report shows that the company's operating income in the first three quarters of 2021 was 7.121 billion yuan, a year-on-year increase of 25.89%; the net profit attributable to shareholders of the listed company was 188 million yuan, a year-on-year decrease of 10.24%; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 129 million yuan, a year-on-year decrease of 12.02%. Among them, the core optical business developed smoothly, with revenue increasing by 59.82% year-on-year.

Lianchuang Electronics has a panoramic lens cooperation with Facebook. In the AR/VR industry, the company has mature key core technologies such as geometric optical waveguides, diffraction optical waveguides and ultra-thin lenses.

ArcSoft

In the first three quarters of 2021, ArcSoft achieved total operating revenue of 450 million yuan, a year-on-year decrease of 10.7%; and achieved net profit attributable to shareholders of the parent company of 120 million yuan, a year-on-year decrease of 41.7%.

On November 2, ArcSoft responded to questions on the interactive platform: The company has a number of core technologies that can be used for AR/VR. For different types of cameras such as single-camera, multi-camera, TOF structured light, ArcSoft can provide corresponding 3D and AR visual solutions to help manufacturers implement them on mobile devices conveniently and efficiently. For integrated or separate AR/VR wearable devices, ArcSoft has completed the development verification and product introduction of related core engines.

Although the Metaverse provides a direction for the development of the Internet, the limitations of current related technologies have also become apparent. The Metaverse, which is in the exploratory stage, still has many uncertainties, and both the industry and the market urgently need to return to rationality.

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