Minsheng Securities: SiC helps SRG waveguides break through, helping AR glasses become the mainstream wearable computing platform.

Minsheng Securities released a research report stating that SiC technology is helping SRG optical waveguide technology to break through. With the continuous cost reduction of SiC substrate SRG, it solves the pain points such as the weight, heat dissipation, and limited field of view of AR glasses, helping AR glasses gradually become a mainstream wearable computing platform. Looking ahead, the cost of related raw materials domestically and internationally can be further reduced. Suggestions for attention are: 1) assembly: Goertek Inc. (002241.SZ); 2) SiC: Sicc Co., Ltd. (688234.SH), Tianke Heida (unlisted); 3) optics: Zhejiang Lante Optics (688127.SH), Zhejiang Crystal-optech (002273.SZ). The main points of Minsheng Securities are as follows: Events The VR Gyro & Qianfang Intelligence is scheduled to hold the "Global AI Glasses Innovation Technology Trend Forum" on March 25, 2025, and also release the "2025 AI+AR Glasses Industry Report." In addition, on February 27, 2025, Longqi, XREAL, Kunyou Optoelectronics, and Zhejiang Jingsheng Mechanical & Electrical reached a cooperation agreement on AR glasses business: the four companies officially signed the "AI/AR Industry Chain Strategic Cooperation Agreement." On February 21, 2025, Tianke Heida and MuDe Micro-nanotechnology established a joint venture, aiming to cooperate in the research and promotion of AR diffractive waveguide mirror technology. Why SiC is the ideal choice for diffractive waveguides SiC based SRG waveguides are a revolutionary innovation. In terms of characteristics, silicon carbide has a high refractive index, wide FOV, and full-color integration, with a refractive index of 2.6-2.7. Specific analysis: 1) Improved display effect: Traditional high refractive index glass monolithic devices only provide a maximum full-color Fov of less than 40. The high refractive index of SiC enables a single-layer silicon carbide waveguide to support imaging greater than 80, greatly enhancing immersion. The SiC waveguide grating material can better avoid environmental light diffraction into the eye's visible range, reducing the impact of "rainbow." 2) Reduced weight: Compared to traditional multilayer solutions, a single-layer SiC solution can significantly reduce device weight, waveguide thickness, and production complexity. 3) Improved heat dissipation: Traditional AR diffractive waveguides accumulate heat from the optical and computing modules, which can be improved in silicon carbide AR glasses. Unlike traditional leg cooling methods, the SiC solution fully utilizes the material's properties, designing the waveguide itself for heat dissipation, greatly improving heat dissipation efficiency. Industry progress The substrate required for SiC diffractive waveguide mirrors is high-purity semi-insulating SiC substrates. According to industry information, the main bottleneck for large-scale adoption of SiC in AR waveguide mirrors lies in material and processing costs. Looking ahead, both domestic and foreign 8-inch SiC substrate production lines have started production and are scaling up shipments, reducing the cost of SiC materials for AR glasses. Furthermore, with the maturation of new technologies such as laser cutting, the processing efficiency of SiC substrates will greatly increase, with more potential for cost reduction. A 6-inch wafer can provide 2 pairs of glasses, an 8-inch wafer can produce 3-4 pairs, and a 12-inch wafer can produce 8-12 pairs. On the SiC manufacturer side, Sanan Optoelectronics' SiC substrates in the field of AI/AR glasses are closely cooperating with domestic and foreign end manufacturers and optical component manufacturers, and have now sent samples to multiple customers for validation. In terms of the whole machine, in September 2024, Meta has already showcased its first prototype AR glasses incorporating SiC waveguides, Orin. Risk warning: Risks of a weak consumer electronics market, technological advancement risks, and intensified industry competition.