Analysts in the metaverse tap into chip makers, big tech and cryptocurrency

The Baidu metaverse concept in XiRang begins with “Creator City” with a tall skyscraper at its center, according to this visualization shared with reporters on December 21, 2021.

Baidu

Global chip makers, which require a huge amount of computing power, are set to benefit from the metaverse — but other technology-related industries could benefit from it as well, analysts say.

The metaverse is widely seen as the next generation of the internet, and broadly refers to a virtual world where humans interact through 3D avatars that can be controlled via virtual reality headsets such as the Oculus.

Through the metaverse, users can participate in virtual activities such as games, virtual concerts, or live sports.

The metaverse attracted attention last year, when social networking giant Facebook announced that it was changing its name to Meta in October.

Analysts said that the big tech companies will benefit as technologies related to this virtual world emerge.

“The winners in the metaverse are really the tech companies,” Ho Wei Fook, chief investment officer at DBS Bank, told CNBC’s “Squawk Box Asia” on Monday. He said semiconductor companies would be clear beneficiaries as the metaverse would need a lot of computing power.

However, the benefits to chip makers will be “uneven,” Morningstar said in a report last week.

Since many tasks in the ‘metaverse’ involve real-time processing of huge amounts of data, this will require the chips involved to use advanced processing nodes that are only available at TSMC, Samsung and Intel. .

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Private banking firm Lombard Odier said in a report released in December that other key areas set up to support metaverse infrastructure investors could consider would be companies that provide the “building blocks,” such as cloud computing, artificial intelligence and video game graphics.

In such cashless virtual environments, blockchain technology and cryptocurrencies may also play a major role. The bank said that a blockchain that supports non-fungible tokens, or NFTs — digital tokens that represent proof of ownership of assets such as artwork, collectibles or memes — could create an “interesting” ecosystem for creating and monetizing digital content.

“This could grant the right to use artwork or special creatures created in the metaverse, opening the door to a new virtual economy. In this area, human creativity has virtually no limits,” the company said.

Facebook’s parent company Meta, as well as Apple, Microsoft and Google, are preparing to launch new software products and services for the metaverse devices.

In Asia, China is set to be a hit in the metaverse as well. Its largest city, Shanghai, has included the Metaverse District in its five-year development plan. The plan called for “promoting the application of the metaverse in areas such as public services, business offices, social entertainment, industrial manufacturing, production safety, and electronic games.”

CNBC’s Evelyn Cheng contributed to this report.



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