The virtual reality industry, which gained traction over the past year due to its applications primarily in virtual entertainment, is poised to play an essential role in the global digital transformation. With this, despite the ongoing semiconductor shortage, VR companies Lumentum Holdings (NASDAQ:LITE), Himax Technologies (NASDAQ:HIMX), and Immersion Corporation (NASDAQ:IMMR) are expected to grow substantially in the coming months. So, let’s take a closer look at these concerns.Virtual reality (VR) technology is increasingly being adopted by the gaming and entertainment industries worldwide. As demand for in-home entertainment climbed last year amid social distancing norms, VR headsets saw high demand. Also, the virtual operations of companies worldwide, coupled with rising demand for virtual events, have driven the VR industry’s growth. Indeed, global VR sales rose 31.7% year-over-year to $1.80 billion in 2020.
This trend is likely to continue because VR is an integral component of the global digital transformation of enterprises. The global virtual reality market is expected to grow at an 18% CAGR over the next seven years.
The current semiconductor shortage has been a significant obstruction to the VR industry’s growth. However, hefty federal investments to bolster chip production coupled with disruptive innovations each day should offset the short-term headwinds. Thus, we think that popular VR stocks Lumentum Holdings Inc . (LITE), Himax Technologies, Inc. (HIMX), and Immersion Corporation (IMMR) could be valuable additions to one’s portfolio.