Minsheng Securities: The AI glasses industry will gradually evolve into AR in terms of shape as it moves towards the sales implementation stage

The Zhitong Finance App learned that Minsheng Securities released a research report saying that the shape of the glasses is close to the three most important sensory organs of a person's ears, eyes, and mouth, and that AR display capabilities provide AI with the ability to output text and images, allowing users to receive more graphic information, providing an effective way to fully tap the potential of AI models to be implemented. Currently, the AI glasses industry is moving from the expected management stage to the sales implementation stage. Judging from the development trend, AR is the ideal display carrier for AI, and smart glasses will inevitably gradually evolve into AR in terms of shape. In terms of investment logic, SoC is the key to AI glasses hardware, and optics is the core issue of AR glasses hardware.

The main views of Minsheng Securities are as follows:

Smart glasses: one of the largest AI model carriers with the most potential for intelligent transformation

The gradual improvement of AI model capabilities has promoted changes in human-computer interaction methods, and created conditions for the birth of new AI terminal carriers. Due to the unique capabilities of AI models, the new generation of smart terminal devices has disruptive innovation and ecological restructuring that is different from the previous Internet era using websites and apps as carriers. Among them, the AI enabling potential of smart glasses is particularly prominent. The shape of the glasses is close to the three most important sensory organs of the human ear, eye, and mouth, and the AR display capability provides AI with the ability to output text and images, allowing users to receive more graphic information, providing an effective way to fully tap the potential of large-scale AI models for application.

Smart glasses: AI first, explore AR

With the launch of Ray Ban Meta in 2023, the market also gradually reached a consensus on the product form of AI glasses, namely eyewear hardware+AI function+shooting+voice. At the same time, RayBan Meta achieved annual sales volume of over 1.4 million pairs in 2024, which also strongly verified the viability of the simplified AI eyewear product business model. As user acceptance of AI glasses gradually increases, the development trend of eyewear products is to gradually superimpose optical display modules in shape and evolve into AI+AR glasses due to their characteristics close to users' vision. Judging from the functional comparison, AI glasses focus on capturing voice and image information, focusing on intelligent processing and human-computer interaction to provide users with intelligent auxiliary services; AR glasses focus more on providing immersive augmented reality experiences. Judging from the hardware composition comparison, the core hardware requirements of AI glasses focus on SoC processors, and put forward low power consumption and high performance requirements; AR glasses not only rely on SoC processors and various sensors, but also require optical modules to generate virtual images.

Optical waveguide and micro LED have become the core bottleneck, and the industry chain collaborates to promote the implementation of AR glasses

Currently, it is difficult to balance performance and lightweight mass production of optical modules. The manufacturing process of upstream optical module components is complicated and the technology is very difficult, causing the cost to remain high, which seriously hampers the mass production and popularization of AR glasses. As solutions continue to be iterated and innovated, the bank believes that the diffractive light waveguide+micro LED optics combination is expected to become the ultimate solution for AR glasses, bringing consumers a better display and wearing experience. In terms of the industrial chain, Lante Optics and Medicare have comprehensive reserves in the optical waveguide processing process, focusing on providing cutting-edge raw materials for the optical waveguide industry, and also has high-precision glass wafer processing technology; Crystal Optoelectronics has a complete industrial chain layout in the optical waveguide chain and has one-stop optical solution capabilities for various optical waveguide technologies; optical machinery/machine assembly manufacturers mainly include Sunyu Optical Technology and Goertek Co., Ltd.; In terms of SiC materials, companies such as Tianyue Advanced continue to deploy.

Risk warning: AR sales fall short of expectations; AR optical solution changes fall short of expectations; exchange rate fluctuations.