Investors prepare for the “gold rush” of Metaverse Hardware

At the end of last year, Sony announced that it had jointly developed a digital entertainment project for the team’s Etihad home stadium with Manchester City for virtual visits by fans around the world. Investors said that this was a quiet announcement, but the sound of football being sucked into the meta universe was deafening.

Companies exhibiting at the Consumer Electronics Show in Las Vegas this week will expect a similar epic interpretation of their products. Aspirations include Samsung, which will give consumers the opportunity to decorate their imaginary houses with digital versions of their household appliances. “This is no longer a fashion, but a mature future trend,” Samsung said Meta universe.

As another exhibitor said, Metaverse-an all-encompassing term, that people will spend more and more lives in more and more time Immersive virtual world -Without a sufficiently accurate definition, anyone can claim that they are an investable game.

But for many people, the parameters are clear enough to predict high demand for certain products.In particular, the manager of a large global technology fund said that after decades of disappointment, 2022 may be the first year that investors consider Virtual reality headset more serious.

Simon Powell, an equity strategist at Jefferies, the US investment bank, said: “Investors need to view the metaverse as the digitization of human activity and the destruction of everything that has not yet been destroyed. He pointed out that Meta Festival projects such as between Sony and Manchester City will add a nearly constant flow of real-world activities reflected in the virtual space.

He said that this process will eventually require more processors, more powerful computing power and wearable devices, which will drive a wave of hardware demand, comparable to earlier smart phones. Manufacturers of components such as semiconductors, servers, sensors, cameras and displays will benefit from this.

“Recall the early days of the mass market Internet investment gold rush. The best bet in the early stages was the hardware—the pickaxe and the shovel,” Powell said.

Apple $3tn market valuationPowell added that there may have been speculation that it is about to launch a headset that will revolutionize consumer technology, just like the original iPhone.

Damian Thong, a technology analyst at Macquarie in Tokyo, said that the sharp rise in the stock prices of US chip maker Nvidia and Taiwan’s TSMC shows that the bets on raw computing power and cloud storage demand driven by Metaverse have become crowded.

A recent report by Citigroup analysts identified more than a dozen stocks, including Taiwanese server designer Wiwynn and Chinese acoustic component manufacturer Goertek, whose products may also be in high demand due to the Metaverse application.

For Japanese and Korean companies that have not yet been included in such lists, the enthusiasm for the construction of Meta Universe represents an urgent appeal.

“Many Korean CEOs have a sense of crisis, and they will fall behind if they don’t adapt to technological changes… Therefore, they may become early adopters of Metaverse,” said Cui Junzhe, CEO of VIP Research and Management.

James Lim, an analyst at American hedge fund Dalton Investments, said that Korean game and entertainment companies have begun to acquire film production and software companies to enhance their visual effects and make their products more suitable for the virtual world.

“Com2uS acquired WYSIWYG Studios. Hybe invested 4 billion won [$3.3m] At the giant step. They are trying to acquire software companies with strong content that can produce graphics quickly,” Lim said.

Zettabytes*'s histogram shows the amount of data created, consumed, and stored globally

For consumers, the type of hardware they buy will depend on how they use Metaworld-whether it is Virtual office Or join Live concert Investors said it performed well in video games. Choi of VIP Research and Management stated that the immersion of Metaverse will depend on the quality of the virtual reality involved.

“3D TV was launched with much fanfare, but the demand for the product is gone. Metaverse needs more upgraded graphics technology to enhance the sense of reality. For example, the Metaverse experience provided by Naver’s Zepeto platform is not real enough,” he added .

Citigroup technology analyst Arthur Lai said that investors need to accept that Metaverse will greatly affect the way people consume social media and entertainment and interact with each other.Once technical sensitivity to voice, eye movements, and gestures increases, as well as the advent of headsets, smartphones, PCs, and physical interactions may be replaced Lose their reputation For “stupid and heavy.”

But this will not happen immediately. Lai said that even the most optimistic manufacturer, the headset market will lag behind smartphones for several years. “But this has nothing to do with virtual reality and smartphones. This is a general move about smarter gadgets becoming more complementary.”

VR headsets used on the gaming platform Steam in 2021

There are different theories as to which type of metaverse experience will ultimately dominate. Metaverse experience can cover from Virtual reality to augmented reality, Mixed Reality and Extended Reality (XR), from fully synthesized content to synthesized content that interacts with the real world.

Either way, Lai said, investors focusing on component manufacturers should expect at least 15 cameras and sensors to be installed in future generations of headsets.

The development of smaller, more powerful, and longer-lasting batteries will make the headset lighter and more comfortable to wear for longer periods of time, which is a major obstacle to current products.Outstanding names include Google’s Oculus Lai said that Sony’s micro OLED display (analysts expect this will be the core of Apple’s future glasses or goggles) and Taiwan’s optical lens manufacturer Genius series.

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Lee Kyung-hak, CEO of Warp Solution, a manufacturer of wireless charging equipment for head-mounted displays in South Korea, said that the demand for Metaverse applications will pick up in the second half of the year, and large-scale consumption may occur by 2023.

“But Metaverse lacks killer content, so people are not so interested in it yet,” Li said, predicting that the field may not replace mobile phones in the next 10 years.

SK Securities analyst Kim Young-woo said that in the end, the development of Metaverse will depend on the next generation of personal VR, AR and XR devices. These rely heavily on Dram chips and image sensors. South Korea’s Samsung, SK Hynix and LG Innotek are leading the world in these areas.

South Korean companies do not directly produce equipment that enters Metaverse. Due to low demand, Samsung stopped producing VR equipment in 2019. “However, if there is enough demand, companies like Samsung can quickly introduce new devices to catch up,” Jin said.

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