Asustek Computer is choosing suppliers for its VR head-mounted display (HMD) devices, with Samsung Display likely to be a supplier of display panels and Taiwan-based makers to undertake OEM production. Production is expected to start in the third quarter of 2017, according to industry sources.

The sources pointed out that demand for AMOLED panels from the HMD industry has been strong thanks to its advantages in terms of thinness, lower power consumption and industrial design compared to traditional TFT LCD panels. Samsung Display is currently the top choice for AMOLED panel supply among HMD developers before any other AMOLED panel makers' products become mature.

The sources also pointed out that AMOLED panel pricing has also been rising since early 2017, showing the supply is still rather tight currently.

Microsoft's aggressive promotions on mixed reality (MR) technologies also prompted many vendors including Acer, Dell, Asustek, Hewlett-Packard (HP) and China-based 3Glassses, to expand into the market, creating strong threats to existing players including Samsung Electronics.

However, among VR devices, Samsung's Gear VR had the strongest shipment performance in 2016, delivering over four million units worldwide. Samsung has also recently announced a new version of Gear VR for 2017 using the Oculus technology.

As for Acer, the Taiwan-based vendor and Microsoft's jointly developed mixed reality HMD that is designed specifically for developers will begin shipping in March.