Significant technological leaps need to be made to make the metaverse dream a reality. Here, we outline areas of required hardware infrastructure progress and highlight the potential Asia tech markets that could benefit:
- Improved processing power: To reach the processing power capable of rendering immersive metaverse experiences requires an order-of-magnitude increase in processing speed. These speeds are at least one or two chip generations in the future (~4 – 8 years) and require substantial investment over the long-term, including in:
- Advanced chips from Taiwan and China
- More semiconductor equipment (e.g., lithography, testing) from Japan and South Korea
- Increased foundry capacity from Taiwan and South Korea
- Better manufacturing materials and packaging processes from China, Japan, Taiwan and Malaysia
- Stronger networks: Network bandwidth will need upgrades to support higher-quality streaming in areas like gaming with virtual and augmented reality. Rendering an individually unique 3D world around you takes up much more data — potentially hundreds of times more per person.
- Lower latency: Today’s data latency is well over what is tolerable for the metaverse. It will require improved switches, fibre optics, networking cards, servers and edge processing. Leaders here include Taiwanese companies building network switches and communications chipsets and Japanese firms specialising in high-precision integrated circuit substrates for advanced semiconductor packaging.
The metaverse will likely create unimaginable experiences, innovative technologies and new digital economies with jobs (and even industries) that don’t yet exist. But what excites us most today is the massive hardware investment necessary to reach the progress the metaverse creates. Countless Asia tech companies will help power this technology and could be long-term winners.
1Source: Boston Consulting Group, April 2021.