Track Hyper | Apple initiates AR glasses project: Domestic companies are gearing up

Author: Zhou Yuan / Wall Street News

"I've been really busy lately, with a full schedule, and it feels like this industry is about to take off." On January 7th, a technical engineer from an XR company told Wall Street News.

Following the January 3rd announcement on the official website of the U.S. Patent and Trademark Office, which showed that NVIDIA had disclosed a patent for AR (Augmented Reality) glasses (US20250004275A1) titled "Backlight-Free Augmented Reality Digital Holographic Technology," Wall Street News learned on January 6th that Apple has also initiated a project for AR glasses, internally codenamed "Atlas."

In the overall cost structure of electronic components for AR glasses, modules using optical waveguide technology and Mini LED/Micro LED are the core components, accounting for 30%-40% of the cost.

Which A-share companies in China have this technology and product?

Although there is no information to prove that any listed companies in China have entered Apple's AR glasses supply chain, relevant products or technologies do exist in listed companies, but the product proportion remains relatively small.

Preparing to Enter the Apple Supply Chain for AR Glasses

From January 7th to 10th, North American time, the 2025 CES (Consumer Electronics Show) is being held in Las Vegas, USA, with AI becoming the undeniable focus and theme.

Gartner has listed AI agents as one of the top ten technology trends for 2025.

The AI hardware that matches software like AI agents includes AR glasses, as well as AI PCs, AI home appliances, and AI home devices.

According to WellsennXR's predictions, starting in 2025, AR smart glasses will rapidly penetrate the traditional glasses market. By 2035, sales of AR smart glasses are expected to reach 1.4 billion pairs.

As a focal point for AI devices at the 2025 CES, in addition to the AR glasses patent "leaked" by NVIDIA on January 3rd, many domestic tech companies are also participating. For example, DPVR announced that it will showcase new AI glasses at CES; Thunderbird Innovation will jointly exhibit with TCL, launching AI shooting glasses V3 and AI+AR optical waveguide glasses X3 Pro, among others.

Apple has also initiated a project for AR glasses, internally codenamed "Atlas," led by the product system quality team. The company has started collecting feedback from Apple employees on smart glasses and plans to conduct more focus group discussions in the near future to prepare for Apple's entry into the smart glasses market.

More importantly, Wall Street News has just learned that domestic supply chains have begun researching how to enter Apple's "Atlas" program supply chain.

Apple's AI glasses focus on improving battery life, sensor technology, and audio quality to provide users with an unprecedented virtual reality experience.

The sensors mainly include accelerometers, gyroscopes, and ambient light sensors, among others.

Apple hopes to achieve a practical breakthrough in the smart glasses field through the "Atlas" program to meet users' demands for lightweight and practical wearable devices, thereby replacing the previously unsuccessful Vision Pro (XR) headset Although it is still unclear when Apple and NVIDIA will launch AR glasses devices or application technologies, will the AR glasses boom at CES 2025 become a "value investment" theme in the A-share market?

Previously, the AR glasses theme had received significant attention in the fourth quarter of 2024, with corresponding listed companies experiencing astonishing stock price increases.

From an industrial structure perspective, the AR glasses industry chain is divided into upstream (precision components), midstream (equipment manufacturing), and downstream (sales and services).

The upstream precision components include SoC chips, displays, sensors, and optical lenses; the midstream mainly consists of equipment manufacturers and OEMs; the downstream includes sales channels and market promotion. Additionally, there is a considerable number of software suppliers, mainly involved in operating systems and various applications.

Although it is currently unknown which A-share listed company will enter Apple's AR glasses supply chain, some companies do possess various technologies and products based on their current business structures.

Core Components Have Technical Reserves Domestically

The optical waveguide module is one of the core components of AR glasses, typically accounting for about 30% of the total cost of AR glasses, and is considered a high-value precision component.

The role of this module mainly lies in image transmission and presentation, responsible for proportionally transferring the images projected by the optical machine and delivering them to the human eye, making it a key component for achieving the mixed display effect of AR glasses.

For example, when using AR glasses to view navigation information or virtual objects, the optical waveguide module can accurately present virtual images in front of the user, integrating them with the real-world scenery.

At the same time, this module can achieve high-quality image display, providing a clear and realistic visual experience.

Through precise design and optimization of the optical path, it reduces issues such as image distortion and aberration, allowing users to experience a more authentic AR effect. For instance, the world's first AR optical module with a PPI exceeding 10,000 developed by Guangfeng Technology uses diffraction waveguide technology, significantly enhancing image clarity and detail.

There are many listed companies related to the AR glasses concept in the A-share market, which need to be identified one by one.

From previous market consensus, Guoxing Optoelectronics has also been included in this concept and has shown an astonishing performance in the short term.

Guoxing Optoelectronics' 2024 semi-annual report shows that the company's business mainly includes LED business and semiconductor packaging and testing business, with LED packaging being the main business segment.

However, what the market is focused on is undoubtedly Guoxing Optoelectronics' layout in the LED direct display field, involving products such as Mini LED and Micro LED.

According to statistics from TrendForce, the "LED devices for high-definition display" developed by Guoxing Optoelectronics has maintained the number one market share in global similar products from 2020 to 2023.

During the reporting period, Guoxing Optoelectronics successfully developed a 3.1-inch P0.115 Micro full-color display module, with the Micro LED overall transfer rate increased to 99.9%.

The Micro LED overall transfer rate refers to the ratio of the number of effective Micro LED chips successfully transferred from the source substrate to the target substrate (such as the display panel) to the total number of Micro LED chips originally provided for transfer For example, if there are initially 1,000 Micro LED chips for transfer, and ultimately 900 successfully transfer and function properly, then the overall transfer rate is 90%.

The overall transfer rate is directly related to the production cost of Micro LED displays. A higher transfer rate means fewer chips wasted during the manufacturing process, thereby reducing raw material costs. Regarding cost reduction, a high overall transfer rate indicates a higher yield, which enhances production efficiency and lowers the difficulty and cost of mass production.

The cost structure of AR glasses shows that Mini/Micro LED costs account for about 40%. Among them, Micro LED technology is more advanced than Mini LED, resulting in a higher cost proportion.

The "no backlight" mentioned in NVIDIA's AR glasses patent should technically refer to Micro LED.

Compared to Mini LED, which requires a backlight module to provide a light source, Micro LED is a self-emissive display technology that does not require a backlight module, allowing each pixel to be individually controlled for illumination.

According to the 2023 annual report, 2024 semi-annual report, and 2024 third-quarter report of NationStar Optoelectronics, the company's main business focuses on LED packaging and component products, which accounted for 72.49% of revenue in 2024 (as of the third quarter of 2024); the share of epitaxy and chip products was only 3.39%.

NationStar Semiconductor has developed a series of Micro LED chips aimed at P0.3 pitch and P0.1 pitch, with technology achieving micro-display screen illumination at a pixel pitch of 7.5 microns, applicable to various products such as smartphones, micro projectors, and AR/VR devices.

It is clear that the proportion of NationStar Optoelectronics' Mini LED and Micro LED products is small, but the technological layout aligns with industry demand. Future attention can be paid to the revenue proportion and gross margin of NationStar Optoelectronics' Mini LED and Micro LED products