It is expected that 20 brands will release 80 models featuring this processor. Combined shipments of Metro Lake and Lunar Lake this year are projected to reach 40 million units. Unlike the previous generation, Lunar Lake’s packaging design integrates LPDDR5x memory into a single package, emphasizing low power consumption.

On May 20th, Microsoft launched its next-generation AI PCs, equipped with a more powerful AI assistant, Copilot, and new features. It also established a new standard for AI PC architecture, “Copilot+ PC.” The initial products all feature Qualcomm’s “Snapdragon X Elite” processors designed with Arm architecture.

Qualcomm’s CPUs in the new PCs are equipped with a Neural Processing Engine (NPE) designed specifically for AI applications, boasting 45 TOPS. This, as per another report from the Economic Daily News, results in a 58% increase in speed and extended battery life compared to Apple’s latest top-tier MacBook, which uses the M3 chip. Additionally, they support Microsoft’s AI chatbot, Copilot.

Intel, on the other hand, made a rare announcement, revealing that its next-generation Lunar Lake will have a total performance exceeding 100 TOPS, with the NPU alone exceeding 45 TOPS—nearly three times that of the previous generation. Additionally, the CPU and GPU combined computing power will exceed 60 TOPS, making it the second qualified processor for Microsoft’s Copilot+ PC platform.

However, it is important to note that according to Intel’s plans, the new generation processors Ultra 5/7/9 will be bundled with memory and shipped together with the CPU. Specifically, the high-end Ultra 9 will be bundled with 32GB of memory, while the Ultra 5 and Ultra 7 will have 16GB and 32GB versions. Per Microsoft’s recommendations, AI PCs need at least 16GB of memory. While Intel’s approach meets this requirement, it limits the ability of brands to adjust specifications and leaves memory manufacturers out of the loop.

In simpler terms, there is still a demand for 8GB memory in lower-end notebooks, and high-end laptops can require more than 64GB of memory. However, Intel’s Lunar Lake constraints make it difficult to plan both high-end and entry-level versions. Industry sources cited in the same report from Economic Daily News indicate that Intel’s next-generation Arrow Lake will not be bundled with memory.

Reportedly, industry sources also state that procurement contracts with memory suppliers have traditionally been long-term, accounting for annual memory requirements. Now, Intel’s bundling of memory with its single platform changes the industry’s ecosystem. Previously, PC brands would develop various combinations (CPU + memory + SSD capacity) for their product lines. However, with Intel defining five laptop CPU + memory specifications, it limits the customization capabilities of PC brands.

With Intel launching Lunar Lake early, AMD is set to counter with its next-generation AI processor Ryzen series named Strix Point in the fourth quarter. The Strix Point processor will feature AI processing power exceeding 50 TOPS, and there will also be an APU, Strix Halo, expected to launch around the end of the year with performance exceeding 60 TOPS, making it a significant player in AI computing power.

CEO Pat Gelsinger recently demonstrated the performance of the Lunar Lake processor, emphasizing that its total AI workload exceeds 100 TOPS, with the NPU contributing 45 TOPS. The CPU features Lion Cove architecture P-cores and Skymont architecture E-cores, while the GPU and CPU together provide over 60 TOPS of computing power. This means Intel’s chip AI performance will be more than three times that of current products, with a total combined performance exceeding 100 TOPS.

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(Photo credit: Intel)

Microsoft, for instance, targeted the corporate segment of the Metaverse, showcasing the use of its mixed reality (MR) device, HoloLens 2, in manufacturing operations. NVIDIA introduced the Omniverse platform for image simulation, thereby facilitating the development of virtual environments within the Metaverse. There were also rumors about Google and Apple launching new virtual reality (VR) head-mounted devices. Perhaps most notably, Facebook’s name change to Meta was a clear indication of its commitment to this emerging field.

As Hype Fades, More Hardware and Content Are Needed to Strengthen the Foundation of the Metavers

Despite initial market optimism, the reality was that wearable technology had not reached maturity, and the quality of virtual content experiences fell short of expectations. As a result, there was insufficient momentum to drive the Metaverse forward in subsequent market developments. Many tech companies established departments dedicated to the Metaverse, but due to lackluster results and issues with resource allocation, these departments often faced workforce reductions, downsizing, or even complete dissolution.

Declining enthusiasm for the Metaverse primarily stems not from a flaw in the idea of blending virtual and real worlds, but from the grandiosity of its concept. The essence of Industry 4.0, after all, revolves around enhancing production efficiency through the data-driven integration of physical and digital realms.

This is a proven approach. Nevertheless, the challenge with the Metaverse lies in its ambitious scale. Without adequate software and hardware support, efforts to expand and implement it often fall short, yielding minimal benefits and, thus, diminishing its commercial appeal.

Essentially, the widespread adoption of technologies like head-mounted devices and a rich content library are vital for industry growth. In response, companies that develop VR and augment reality (AR) in recent years have pivoted their focus from the broader environmental framework towards improving wearable devices and creating engaging content. In doing so, they aim to boost the practical value of adopting VR and AR.

From Virtual Interaction to Spatial Computing, the Scope of Applications for Head-mounted Devices Continues to Expand

In 2023, according to TrendForce’s analysis, Meta’s Quest series dominated the global VR and MR device market, securing nearly 70% of total device shipments. This significant market share places Meta at the forefront, with Sony’s PS VR series ranking second, followed by other manufacturers like PICO and HTC. Entering the fray in 2024, Apple introduced its Vision Pro, which is expected to claim a 6% share of the global market.

Meta’s latest offering, the Quest 3, has adopted pancake lenses that enhance image clarity while slimming down the device’s profile. It is powered by the Qualcomm Snapdragon XR2 Gen 2, a (SoC) tailored for head-mounted devices that significantly boosts GPU and AI processing capabilities.

The Quest 3 marks a pivotal shift for Meta from VR to MR. Equipped with dual front-facing RGB cameras and advanced features like depth projection and room mapping, the Quest 3, alongside the higher-end Quest Pro, supports a range of MR applications. Additionally, the tracking capabilities of the Quest 3 are augmented by computer vision and machine learning technologies. With Meta’s ongoing collaboration with LG on new product development, the focus is now on extended reality (XR) applications linked with the television ecosystem.

Apple’s Vision Pro, which was launched in February 2024, has reignited market interest in VR.

This device fills a previously unaddressed gap in Apple’s portfolio by offering a VR head-mounted device that integrates seamlessly with iPhones, iPads, and other devices within Apple’s ecosystem, thereby enabling functions like image and video projection onto larger screens. The introduction of the Vision Pro brought the concept of spatial computing into the limelight, enabling users to interact with virtual objects in a natural and intuitive way and thus infusing fresh perspectives into the industry.

Moreover, at CES 2024, Sony unveiled an XR head-mounted device dubbed a “spatial content creation system.” Like the Apple Vision Pro, this device leverages the advantages of spatial computing. It’s designed as a commercial tool for developing 3D content, offering users precise and intuitive control over virtual objects, thereby simplifying the process of creating 3D models.

From Taiwan, ASUS has recently introduced its first AR glasses, the AirVision M1. These glasses are designed to function as a secondary screen, ideal for use outdoors or in situations where extra screens are necessary at home.

Taiwan-based Companies Expand into the Supply Chain for Headsets, Focusing on Optics, Chips, and Assembly

TrendForce analyst P. K. Tseng said that a critical aspect of the transformation for VR head-mounted devices is the increasing need for key components that are lighter and more compact, particularly pancake lenses, which are gaining importance due to their contribution to volume reduction.

However, the technological complexity and higher cost of manufacturing these advanced optical components mean that suppliers, such as GSEO and Young Optics, are relatively limited. This presents a blue ocean market opportunity, likely attracting more manufacturers to develop pancake lens components.

Furthermore, the trend is expected to drive demand for smaller-sized panels. While mainstream LCD panels continue to be widely used, the advent of devices like the Apple Vision Pro is anticipated to increase the adoption rate of Micro OLED panels.

Additionally, as standalone virtual devices become more mainstream in product design, and as the need for processing large volumes of image and sensor data independently by SoCs grows, demand will rise for dedicated chips used in VR and AR devices. For instance, MediaTek is rumored to be developing an exclusive AR chip for Meta.

System or device assembly is a key area of focus for Taiwan-based companies, particularly evident in the efforts of major ODMs like Quanta and Foxconn. These companies are enhancing their VR and AR hardware manufacturing through various strategies, including partnerships, mergers and acquisitions, and investment initiatives.

In the VR device supply chain, the strength of system assemblers lies in their ability to offer comprehensive product solutions, which expands the options available to prospective clients. The assembly of VR and AR devices presents unique challenges due to the necessity for high-quality image rendering and real-time motion capture. Numerous components are involved in the process.

Not all VR and AR device brands can develop head-mounted devices completely in-house, as demonstrated by companies like Meta and Sony. For newer market entrants, securing a comprehensive product solution that allows for future customization is a more desirable strategy. This demands that system assemblers have significant expertise in relevant technologies and ODM capabilities. As such, as opportunities in the VR and AR market continue to emerge, these assemblers are well-prepared to offer solutions for head-mounted devices.

Generative AI and Added-Value from Applications Will Sustain Future Growth Momentum

Beyond hardware, the focus on creating more content and valuable applications will be a major topic in the next phase of VR industry’s development, with generative AI poised to play a pivotal role.

Taking gaming as an example, VR game development is known to be exceedingly time-consuming, requiring developers to dedicate substantial amounts of time to coding. As a result, the games often lack diversity, customization, and meaningful game mechanics.

However, leveraging generative AI can expedite the game development process without sacrificing quality or increasing costs. Recent market analyses suggest that the adoption of generative AI could significantly reduce the time required to create XR learning modules from the 5-10 days typically seen in 2021 to less than 30 minutes today.

Consequently, major game engine providers like Unity are seizing this business opportunity. In mid-2023, Unity introduced a suite of generative AI development solutions tailored for VR game production. These solutions can be employed to create characters, objects, assets, and sound effects, thus significantly reducing development costs.

According to TrendForce’s research, global shipments of VR head-mounted devices are projected to register a slight year-on-year drop of 1.8%, but the annual total is still expected to surpass 9.3 million units.

Furthermore, with the releases of many new products ranging from chips and peripherals to complete systems, many of which were showcased at this year’s CES and MWC, there is strong bullish sentiment regarding the development of the VR industry. The strategies of major manufacturers for VR and AR devices also demonstrate intense efforts to explore new use cases beyond existing applications, or to expand into other commercial sectors such as remote assistance, virtual learning, and simulation training.

Additionally, in many countries, VR and AR are now being incorporated into medical treatments, such as psychological therapy and physical rehabilitation. Although the progress in promoting VR and AR technologies still depends on factors like pricing, specifications, and user experience, the expansion into new application markets is a positive development, particularly given the current shortage of content.

Therefore, the added-value provided by new applications will be a key determinant of the VR market’s growth momentum. Furthermore, the efficiency of using generative AI in content production holds the potential to propel device manufacturers into the next technological generation.

Join the AI grand event at Computex 2024, alongside CEOs from AMD, Intel, Qualcomm, and ARM. Discover more about this expo! https://bit.ly/44Gm0pK

(Photo credit: Apple)

According to a report from UDN, AMD plans to invest NTD 5 billion (roughly USD 155 million) to establish an R&D center in Taiwan and intends to apply for the A+ Industrial Innovative R&D Program from the MOEA, highlighting Taiwan’s critical role in AI chip design and manufacturing.

The MOEA has confirmed that AMD applied for the A+ Industrial Innovative R&D Program subsidy at the end of 2023. However, the funding for the program has already been exhausted. Therefore, funds must be allocated in the fifth phase of the A+ Industrial Innovative R&D Program, with the science and technology budget to be set for 2025.

This budget allocation must be approved by the new government administration. Additionally, MOEA officials stated that AMD must submit a concrete plan and gain approval from a review committee established by the Industrial Technology Department of the MOEA.

Previously, the MOEA’s substantial subsidies to global companies under the A+ Industrial Innovative R&D Program sparked mixed reactions within the industry. Some prominent local IC design companies criticized the MOEA, arguing that supporting global companies leads to competition against local businesses and drains valuable local R&D talent.

To avoid controversy, the MOEA has set forth four specific requirements for AMD.

First, they hope AMD will collaborate with Taiwanese IC design companies. Second, any AI servers developed should be manufactured in Taiwan. Third, at least 20% of the R&D workforce should be sourced from abroad, and high-level executives should be stationed in Taiwan. Fourth, AMD should partner with Taiwanese universities to cultivate talent jointly. The MOEA reports that AMD’s response has been very positive, and a thorough review of the application will take place in the second half of the year.

To date, the MOEA’s A+ Industrial Innovative R&D Program has approved subsidies only for two global companies, Micron and NVIDIA, providing them with NTD 4.722 billion (USD 146.48 million) and NTD 6.7 billion (USD 207.8 million), respectively. The MOEA believes this strategy helps solidify Taiwan’s competitive edge in the global semiconductor and AI sectors.

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(Photo credit: AMD)

The low-profile visit was made to secure TSMC’s advanced manufacturing capacity, potentially 2nm process, booked for Apple’s in-house AI-chips, according to the report.

Apple has been collaborating with TSMC for many years on the A-series processors used in iPhones. In recent years, Apple initiated the long-term Apple Silicon project, creating the M-series processors for MacBook and iPad, with Williams playing a key role. Thus, his recent visit to Taiwan has garnered significant industry attention.

Apple did not respond to the rumor. TSMC, on the other hand, has maintained its usual stance, not commenting on market speculations related to specific customers.

According to an earlier report from The Wallstreet Journal, Apple has been working closely with TSMC to design and produce its own AI chips tailored for data centers in the primary stage. It is suggested that Apple’s server chips may focus on executing AI models, particularly in AI inference, rather than AI training, where NVIDIA’s chips currently dominate.

Also, in a bid to seize the AI PC market opportunity, Apple’s new iPad Pro launched in early May has featured its in-house M4 chip. In an earlier report by Wccftech, Apple’s M4 chip adopts TSMC’s N3E process, aligning with Apple’s plans for a major performance upgrade for Mac.

In addition to Apple, with the flourishing of AI applications, TSMC has also reportedly beening working closely with the other two major AI giants, NVIDIA and AMD. It’s reported by the Economic Daily News that they have secured TSMC’s advanced packaging capacity for CoWoS and SoIC packaging through this year and the next, bolstering TSMC’s AI-related business orders.

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(Photo credit: TSMC)

As per a report from global media outlet tom’s Hardware, on May 7, 2024, the U.S. Department of Commerce informed Qualcomm that it was revoking the company’s license to export 4G and certain other integrated circuit products, including Wi-Fi products, to Huawei. a nd its affiliates and subsidiaries, effective immediately.Consequently, Qualcomm expects no product revenue from Huawei after this year.

According to TechNews, while Qualcomm used to provide processors to Huawei for use in its smartphones, Huawei’s HiSilicon division has developed its own chipsets, Kirin 9000 and 9010, therefore barely needing the support from Snapdragon processors.

Qualcomm reportedly noted in another statement that Huawei has recently launched new 5G-supported devices using its own IC products. Although Qualcomm can still sell IC products to Huawei under the current license, it does not expect to receive any product revenue from Huawei after this year.

Despite having its own processors, Huawei lacks the alternative for Intel’s Core or Xeon CPUs from PCs and servers, and will likely continue using them for the foreseeable future, according to tom’s Hardware. Meanwhile, Qualcomm may continue to collect patent royalties from Huawei and other Chinese smartphone manufacturers.

Qualcomm also mentioned that it has recently extended, renewed, or signed licensing agreements with several major OEMs. Negotiations are ongoing with key OEMs, including Huawei, for agreements set to expire at the beginning of fiscal year 2025.

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(Photo credit: Qualcomm)

It is reported that, to facilitate this transition, Google has expanded its Taiwanese R&D center, enabling closer collaboration with TSMC to produce its most advanced silicon. In late April, Google opened its second hardware office in Taiwan for Pixel, Fitbit, and Nest development, located at the TPark campus in New Taipei City.

Wccftech stated that Google has changed its stance, as Tensor G3’s performance lags behind its competitors, and TSMC might help to resolve the problem. Tensor G3, manufactured utilizing Samsung’s 4LPP node, is reported to lag behind in CPU performance, if compared with Qualcomm’s Snapdragon 8 Gen2 and Apple’s A17 Pro.

The aforementioned report suggested that Google plans to utilize TSMC’s 3nm ‘N3E’ process for its advanced chipset, the same node employed in Apple’s M4 chips that power the latest iPad Pro models.

At the Google I/O 2024 developer conference on May 14th, Google unveiled its 6th generation custom chip, the Trillium TPU, rumored to be manufactured on a TSMC 3nm or 4nm process, according to a report by CTEE. It is also reported that Google has been aggressively working on its upcoming TPU models, collaborating with Taiwanese fabless companies MediaTek and Alchip. Taiwan’s largest PCB substrate manufacturer, Unimicron, is also said to be included in the Trillium TPU’s supply chain.

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(Photo credit: TSMC)

The Kunpeng Pro development board, an alternative of Raspberry Pi, is reported to be powered by a quad-core 64-bit Arm processor and an AI processor integrated into the same package. However, details of these processors remain undisclosed.

This is a tactic Huawei has employed previously to deter Western scrutiny. Huawei has been facing strict sanctions from the U.S. government, restricting its access to certain chips and chip-making technologies. On May 7th, the U.S. authority revoked the licenses of Intel and Qualcomm to supply semiconductor chips used in laptops and handsets to Huawei, which took immediate effect.

The development board is reported to be designed for a diverse user base, including consumers, developers, and students. It comes preinstalled with the openEuler OS, the openGauss database, and a range of internet, productivity, and software development tools.

Tom’s Hardware has learned that Kunpeng Pro uses a custom Huawei Kunpeng CPU that is paired with an AI FPGA processor. The CPU is believed to be a quad-core ARM model, while the AI FPGA processor is reportedly to offer 8 TOPS (Trillions or Tera Operations per Second) of AI computing power.

Qualcomm’s Snapdragon X Elite, launched in late 2023, delivers peak AI computing performance of 45 TOPS, while Apple’s M4, released in early May, is rated at 38 TOPS.

(Photo credit: Orange Pi)

According to reports from the CTEE and Bloomberg, Apple has flown retail employees from various countries to its headquarter in Cupertino, California for training. The training program, started last week, lasted four days and focused on teaching staff how to demonstrate Vision Pros to customers. Participants in the training came from Germany, France, Australia, Japan, South Korea, Singapore, and China.

Though Apple has not disclosed the actual debut date or the countries where the Vision Pro will be launched outside the US, in March, a report by MacRumors suggested that code within VisionOS might hint the potential sequence of international sales for the Vision Pro.

Apple has added 12 new languages to the Vision Pro’s virtual keyboard and auto-correction features, including English versions for five regions (Australia, Canada, Japan, Singapore, and the UK), French for two regions (France and Canada), German (Germany), as well as Japanese, Korean, Traditional Cantonese, and Simplified Chinese, which indicates that nine countries, including China, Japan, and Korea, may be among the first markets Vision Pro could potentially make its debut.

According to a January estimate by TrendForce, if initial sales are strong, Vision Pro shipments could reach between 500–600 thousand units in 2024. 

Apple’s Vision Pro features a Micro OLED display, currently exclusively supplied through a process that uses TSMC’s CMOS backplanes in combination with Sony’s deposition process.

(Photo credit: Apple)

According to sources cited by TheElec, component suppliers to Samsung, which were gearing up for mass production of parts for these foldable devices, indicated that they have not received orders for the budget model Fold 6.

Initially, the South Korean tech giant had planned to unveil three foldable phones this summer: the Galaxy Z Fold 6, the Galaxy Z Flip 6, and an affordable version of the Fold 6.

The Fold 6 features a digitizer layer on the screen to support the S-Pen stylus, but the budget model was intended to be thinner and omit this feature.

It is reported that Samsung, after conducting a durability test of 200,000 folds for the budget model, with water and dust resistance functions added, has founded out that the product turned out not to be thinner than its Chinese rival Huawei’s equivalent, thus lacking significant differentiating points from these rival products.

Huawei’s Mate X3 and X5, launched last year, were both around 11.08mm thick, according to information obtained on Huawei’s website. Samsung’s Galaxy Z Fold 5 was 13.4mm thick, while Xiaomi’s Mix Fold 3 was 10.9mm thick.

According to analysis from TrendForce, global shipments of foldable phones reached 15.9 million units in 2023, marking a 25% YoY increase and accounting for approximately 1.4% of the overall smartphone market. In 2024, shipments are expected to rise to about 17.7 million units, growing by 11% and slightly increasing the market share to 1.5%. However, this growth rate remains below market expectations, with the segment’s share predicted to exceed 2% only by 2025.

Trendforce points out that the slowdown in the growth of foldable phones could be attributed to two main factors: Firstly, consumer retention is low due to frequent maintenance issues faced by first-time foldable phone users, leading to a lack of confidence in the product. As a result, users may opt for high-end flagship smartphones when considering replacements. Secondly, the current price points of foldable phones have yet to reach the sweet spot for consumers, making it challenging to meet sales targets based solely on pricing.

(Photo credit: Samsung)

Moreover, the smartphone market leader is said to have already secured a supply of flexible panels from Samsung in the first half of this year, hinting at its determination to enter the foldable market.

Hinges are expected to be the most crucial and newly added component for Apple’s foldable device, experiencing a surge in demand. Shin Zu Shing, Taiwanese supplier for foldable smartphone hinges, having cooperated with Apple in the field for many years, stands to benefit greatly.

In addition,  other Taiwanese Apple supply chain partners, including Foxconn, Largan Precision, and Pegatron, are anticipated to benefit similarly as with existing iPad and iPhone production. The aforementioned Apple suppliers typically refrain from commenting on individual customer and order dynamics.

A report from SamMobile also indicated that, Apple may have signed a contract with Samsung Display (SDC) for the supply of foldable displays. It is estimated in the same report that limited supplies will begin in 2025, ramping up to mass production in 2026. By 2027, the supply is expected to reach 65 million units, increasing to 100 million units in 2028.

Additionally, the ordered display sizes are larger than those of existing iPhones, indicating that the display components procured by Apple from Samsung will be used in new foldable device products.

Industry sources cited in the report from Economic Daily News believe that Apple’s first foldable device will be unveiled by the end of 2025 or early 2026, targeting the ultra-high-end market segment. It is expected to come in two sizes: 7.9 inches and 8.3 inches, competing against foldable devices from Samsung and Huawei.

According to the analysis released by TrendForce in the second half of last year, Apple’s development in the folding field still requires time. Apple’s foray into foldables has been tepid, to say the least.

TrendForce reports that global shipments of foldable phones reached 15.9 million units in 2023, marking a 25% YoY increase and accounting for approximately 1.4% of the overall smartphone market. In 2024, shipments are expected to rise to about 17.7 million units, growing by 11% and slightly increasing the market share to 1.5%. However, this growth rate remains below market expectations, with the segment’s share predicted to exceed 2% only by 2025.

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(Photo credit: Apple)