VR Picks and Shovels
Stephen Chou@stephenc
−8.8%
since Sep 30
The idea
I believe virtual reality becomes a real computing platform over the next decade, and the surest way to own that shift is through the parts inside every headset rather than betting on any single device maker. This basket spreads across displays and optics, compute silicon, sensors, memory and assembly, so whoever wins the device war, these suppliers likely benefit. It leans on larger names for stability and smaller specialists for upside, with a small cash reserve kept aside to add on dips.
What it owns
- The screens and optical components inside headsets are the most complex and expensive parts to manufacture, so their suppliers capture significant value per unit. · Sony GroupIt makes the micro-OLED screens inside premium headsets including Apple's, and supplies them to all major device makers as VR becomes a real platform., Coherent CorpIt supplies the optical and laser components that focus light from tiny headset displays into images eyes can see clearly., CorningIt makes specialty glass and lens materials that headsets and their cameras need, selling to all device makers regardless of which one succeeds., Universal DisplayIt collects royalties on OLED display materials from nearly every OLED screen made, including those destined for VR headsets., Himax TechnologiesIt designs the driver chips that control images on headset displays, with growth tied to rising VR and AR device shipments.27%
- Every VR headset needs processing chips to render immersive 3D worlds, and a few specialists supply them across all device makers. · QualcommIts Snapdragon XR chips power most standalone headsets today, making it the default processor in the emerging VR platform., NVIDIAIts processors render 3D graphics both on PCs connected to headsets and in cloud tools that create VR content, so more headsets means more rendering demand., Taiwan SemiconductorIt manufactures cutting-edge chips for Qualcomm, NVIDIA, AMD and most other suppliers in this take, earning a fee regardless of whose silicon wins inside devices., Advanced Micro DevicesIt builds custom chips for console-style devices and is positioning itself as a second source of VR headset processors through its spatial AI acquisitions.26%
- Hand, eye and motion tracking make VR feel real, and a small group of companies supplies these sensors and chips to all major headset makers. · STMicroelectronicsIt ships motion sensors that detect head movement in enormous volumes across consumer devices, including every VR headset made., Lumentum HoldingsIt makes the lasers used for depth sensing in headsets, so winning 3D-sensing business in consumer devices keeps this part in the take., Cirrus LogicIt makes the audio and haptics chips that deliver realistic sound and touch feedback, essential elements of immersive VR experiences., SynapticsIt builds interface and wireless connectivity chips that handle how users interact with VR devices, from controllers to hand tracking., Immersion CorpIt holds haptics patents and collects licensing fees when device makers add touch feedback to controllers and VR interfaces.19%
- Standalone headsets need fast memory and wireless radios to function without cables, creating steady component demand as device shipments grow. · Skyworks SolutionsIt makes the wireless radio chips that let standalone headsets connect to networks without cables, essential for practical consumer VR., Micron TechnologyIt sells memory chips that every VR headset requires, and rendering 3D worlds locally demands significant memory per device.12%
- Contract manufacturers and specialty materials suppliers earn revenue on every headset produced, regardless of which device maker wins the platform war. · JabilIt physically assembles headsets and components for major device brands, earning per unit regardless of which company wins the platform., Flex LtdIt is a contract manufacturer of headsets and components, earning on every unit shipped as production volumes scale over the decade.9%
- Cash7%