In November 2023, Quanta, a Taiwanese electronics manufacturer, has announced a collaboration with the U.S. AR glasses technology provider Vuzix. Through the adoption of Vuzix’s waveguide technology and optical display components, Quanta is set to engage in mass production for smart glasses, with shipments expected to commence in 2024.

The contract manufacturer like Quanta has been strengthening its technical capabilities in the VR and AR domains in recent years, aiming to possess the capacity to provide comprehensive product solutions and seize opportunities in the flourishing virtual market.

TrendForce’s Insights:

1. Quanta Continues to Explore AR Glasses, Collaboration with Vuzix Aims for Expanded Applications

In recent years, Quanta has actively invested in the AR glasses sector, including collaborative efforts with STMicroelectronics in late 2020 to develop a reference design for AR glasses and a $20 million investment in the Israeli AR startup Lumus in 2021.

The ongoing partnership with Vuzix, planning for complete device shipments, underscores Quanta’s optimistic outlook on the application development and future business opportunities for AR glasses.

Given Quanta’s key product and service areas spanning mobile computing, home entertainment, IoT, and smart manufacturing, the current trend of the metaverse positions VR and AR devices as crucial gateways to enter and add value to these domains.

With Quanta transitioning from a device supplier to a platform service provider and implementing a comprehensive development strategy of hardware-software integration, the continued focus on AR glasses holds the potential to expand profit margins for Quanta.

Vuzix, in collaboration with Quanta, has secured a prominent position in the VR and AR device market through its wearable display technology. Notably, Vuzix has developed the world’s first Micro LED AR glasses and consistently received CES Innovation Awards from 2020 to the present year.

Their product highlights encompass AR technology for swim goggles, the establishment of a comprehensive smart glasses platform featuring microLED and waveguide technologies. The recently unveiled Ultralite S, focused on sports and fitness scenarios, seamlessly integrates with smartphones or smartwatches to display real-time activity data and information on the glasses, earning it the CES 2024 Innovation Award.

With Vuzix possessing critical optical technology and components across a broad product range, the collaboration aligns well with Quanta’s AR transformation, particularly enhancing Quanta’s QOCA telemedicine cloud platform in the medical field. The synergy between the two marks a harmonious and mutually beneficial partnership.

2. Contract Manufacturer Actively Strengthen VR and AR Tech Capabilities Through Collaboration and Investment to Seize Virtual Opportunities

In addition to Quanta, various contract manufacturers have been actively enhancing their technological capabilities in the VR and AR industry through collaborations, mergers, and investments. Notably, Foxconn has been investing in and collaborating with key players in the VR and AR device market since 2022, including XRSPACE, Varjo, and the early part of 2023 with Jorjin.

Looking at other contract manufacturers, GoerTek works with major clients like Meta, Sony, and PICO, Luxshare has Apple Vision Pro assembly orders, and Pegatron has handled products for Microsoft HoloLens and Oculus, while Quanta has been involved with Microsoft Mixed Reality Headset.

Therefore, for Foxconn and other companies aiming to enter this field, adopting more investment and collaboration strategies, or even directly acquiring key tech firms, will be the fastest way to rapidly strengthen their competitive position in the VR and AR market.

Looking at the overall supply chain of the VR and AR virtual device industry, the efforts of assembly plants to strengthen their technical capabilities go beyond providing assembly outsourcing. To a certain extent, this is also aimed at developing the ability to offer complete product solutions, catering to a broader customer base.

Given that these devices prioritize image precision and real-time capture, high-end products require more components and sensors. Moreover, the non-uniform design of head-mounted devices adds complexity to the assembly of VR and AR devices.

Additionally, not all companies have the resources and industry competitiveness, as in the case of Meta and Sony, to independently develop head-mounted devices from scratch. For many, obtaining a more comprehensive product solution and then making adjustments is a more practical approach. This necessitates contract manufacturers to have enhanced VR and AR technology and ODM capabilities. This way, amidst the flourishing opportunities in the virtual market, they can offer complete head-mounted device solutions.

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