One Excellent Way to Benefit From the Growth of Virtual Reality

When it comes to benefit from Virtual Reality, NVIDIA (NVDA) is still my favorite pick. However, the VR space is a multi-billion dollar industry and is expected to grow at double-digit pace. Needless to say, the sector will have several dominating companies. My other favorite pick to benefit from the VR market is Himax Technologies (HIMX). That being said, I also like Himax because it, like NVIDIA, has a diversified source of revenue, making it less prone to risks.

Many tailwinds

At the present stage, Fitness tracking devices, smartwatches, and virtual reality have grasped their position at the top of tech headlines.
It is predicted that almost 155 million wearable tech devices will be shipped by 2019. However, companies like Apple, Fitbit, Garmin and Under Armour etc. have already grasped a strong position in the wearable tech industry. But, there are some small wearable tech firms who have the potential to provide huge profit, and Himax Technologies is one of them.

On the other hand, Microsoft is anticipated to use Himax’s micro display technology in its HoloLens augmented reality headset. The company’s wafter level optics (WLO) will also be used, as they are fundamentally small camera lenses built on top of semiconductor processors. As per analysts from Chardan Capital Markets, HoloLens could bring in $80 million to $120 million in revenue for Himax Technologies in FY2016.

However, it is not only Microsoft that has perceived the potential of Himax’s display and imaging technologies, as Google has also used the company’s technology in the first version of Google Glass. Furthermore, it is highly likely that Google will continue to use Himax’s components for its Google Glass version 2.0 also.

Apart from these, one of the most significant markets was the large panel IC market. Due to the robust demand from China, the company successfully managed to surge its market share in this segment and strategizes to carry on its expansion for the other half of the year also.

Moreover, virtual reality and augmented reality businesses are growing rapidly, and the company is receiving many orders due to these emerging technologies. At the present stage, Oculus Rift is the leading VR device, and Himax supplies time controllers for Oculus Rift. Virtual reality is at its infant stage, but it is growing rapidly. The company is also putting in lot of efforts to diversify its portfolio instead of focusing on specific business. As a result, Himax Technologies will reap huge profits with the growth of virtual reality trend and is my second favorite pick from the sector.
Published on Jun 15, 2016
By Prudent Investor

Copyrighted 2016. Content published with author's permission.

Posted in ...