Global AR/VR Chip Market Projected to Grow at 20.3% CAGR, Reaching $10.1 Billion by 2029

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What Will the AR/VR Chip Industry Market Size Be by 2025?
The size of the AR/VR chip market has experienced a significant expansion recently. It is projected to surge from $3.96 billion in 2024 to $4.82 billion in 2025, corresponding to a compound annual growth rate (CAGR) of 21.9%. The previous growth can be credited to the widespread adoption of augmented reality (AR) and virtual reality (VR) applications, advancements in graphics processing unit (GPU) technologies, expansion in the spheres of gaming and entertainment, a rise in the utilization of AR/VR in healthcare and education sectors, as well as the need for high-performance computing in AR/VR devices.

What's the Long-Term Growth Forecast for the AR/VR Chip Market Size Through 2029?
Expectations are high for the AR/VR chip market in the coming years with a projected size of $10.1 billion by 2029, growing at an annual compound rate (CAGR) of 20.3%. Factors contributing to this projected growth include, the broadening of augmented reality glasses and headsets, the incorporation of AR/VR into commercial and industrial settings, the incorporation of 5G technology for superior AR/VR experiences, surging demand for compact, power-efficient AR/VR chips, and growth in extended reality (XR) and mixed reality (MR) applications. Anticipated trends for the forecast period consist of the progression of AI-driven AR/VR experiences, the utilization of edge computing for instantaneous AR/VR processing, incorporation of AR/VR chips into smart glasses and wearable devices, focus on haptic feedback and sensory integration in AR/VR gadgets.

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What Are the Key Growth Drivers Fueling the AR/VR Chip Market Expansion?
The rise in the use of mobile devices is anticipated to push the expansion of the AR/VR chip market. Mobile devices, such as portable tablets and other lightweight gadgets, can be conveniently carried anywhere. Thanks to enhancements in data storage, computing, and display technology, these devices can now handle virtually all operations that previously required larger personal computers. AR/VR chips fitted in smartphones offer highly lifelike virtual and augmented reality gaming experiences, whereby users interact with their surroundings with their own hands. For example, as reported by G2.Com Inc, a US-based software corporation, in January 2024, 86% of the global population in 2023 utilized smartphones, which contributed to 59% of web traffic in 2022, and 90% of mobile time was spent on applications in 2021. In the U.S., they made up 70% of digital media usage. However, feature phones still cover 17% of lower-income and older Americans. Therefore, the extensive use of mobile devices is fueling the growth of the AR/VR chip market.

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What Are the Key Trends Driving AR/VR Chip Market Growth?
The progression of technology is a rising trend significantly influencing the AR/VR chip market. Prominent businesses in the AR/VR domain are prioritizing technological innovations to maintain their market standing. An example of this was seen in September 2023, when Qualcomm Technologies Inc., an American semiconductor company, unveiled its latest chips for XR and AR platforms. These included the Snapdragon XR2 Gen 2, engineered for VR and mixed-reality apparatuses, and the AR1 Gen 1, specifically devised for smart glasses. The new chips provide a GPU performance enhancement of 2.5x and an 8x improvement in AI capabilities, enabling immersive mixed and VR experiences. Meanwhile, the Snapdragon AR1 Gen 1 Platform powers stylish smart glasses equipped with real-time AI functionalities such as visual search and hands-free broadcasting. These breakthroughs, realized in cooperation with Meta, are set to debut in 2023, significantly transforming XR and AR devices by providing more potent, light, and user-friendly tools.

How Is the AR/VR Chip Market Segmented?
The AR/VR chip market covered in this report is segmented -

1) By Chip Type: Processor ICs, User Interface ICs, Power Management ICs
2) By Device Type: Head Mounted Display, Gesture Tracking Device, Projector and Display Wall, Head Up Display, Handheld Device
3) By End User: Gaming, Entertainment and Media, Aerospace and Defense, Healthcare, Other End Users

Subsegments:
1) By Processor ICs: Graphics Processing Units (GPUs), Application Processors, Digital Signal Processors (DSPs)
2) By User Interface ICs: Touchscreen Controllers, Gesture Recognition ICs, Audio Or Video Interface ICs
3) By Power Management ICs: Voltage Regulators, Battery Management ICs, Power Distribution ICs

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Which Companies Are Leading the Charge in AR/VR Chip Market Innovation?
Major companies operating in the AR/VR chip market include Nvidia Corporation, Imagination Technologies Limited, MediaTek Inc, Intel Corporation, Spectra7 Microsystems Inc, Advanced Microdevices Inc, International Business Machine Corporation, Samsung Electronics Co Ltd, Huawei Technologies Co. ltd., Broadcom Inc, Rockchip Electronics Co Ltd, Advanced RISC Machines Ltd, HiSilicon (Shanghai) Technologies CO. Ltd., Qualcomm Inc., Texas Instruments Incorporated, Xilinx Inc., Arm Limited, Cadence Design Systems Inc., Meta Platforms Inc., Apple Inc., Microsoft Corporation, QUALCOMM Incorporated, Adobe Inc., Alphabet Inc., Magic Leap, Lytro, Inpria

Which Regions Are Leading the Global AR/VR Chip Market in Revenue?
Asia-Pacific was the largest region in the AR/VR chip market in 2024.North America was the second-largest region of the AR/VR chip market. The regions covered in the AR/VR chip market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa

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