Wellsenn XR — Dissecting Xingyi Intelligent’s 999 RMB AR Glasses: How Does Nika Optics’ Volume Holographic Waveguide Rewrite the Industry’s Cost Rules?

Neel Mehta
Sep 26
5 min read

Beyond expectations: AR glasses enter the 1,000 RMB era

At the recently concluded 26th China International Optoelectronic Exposition (CIOE), Nika Optics, together with Xingyi Intelligent and Hongshi Technology, announced a major technical collaboration: the global debut of the AR99 smart glasses, the world’s first product equipped with volume holographic (VHG) waveguide technology.

With a breakthrough price of just 999 RMB, this launch signals that the AR glasses industry is saying farewell to the “high-cost threshold” and stepping into an era where AR becomes affordable to all.

*This article is translated from Wellsenn XR – WeChat Official Account: Dissecting Xingyi Intelligent’s 999 RMB AR Glasses: How Does Nika Optics’ Volume Holographic Waveguide Rewrite the Industry’s Cost Rules?

Breaking the 999 RMB barrier: how cost reduction is achieved

In a market where most AR glasses are priced at 3,000–4,000 RMB, how does Xingyi Intelligent manage to bring the AR99 down to just 999 RMB? The answer lies in the hardware cost structure, especially the core optical components, which ultimately define the ceiling of AR device pricing.

A complete AR glasses hardware system generally consists of:

Optical engine module
Optical waveguide lenses
Acoustic modules
Mainboard chipset
Structural parts

Among these, the acoustic modules, mainboard, and structural parts are cross-category consumer electronics components. They can directly reuse mature solutions and mass-production modules from smartphones and tablets. Thanks to economies of scale, these parts are no longer the cost bottleneck.

What truly drives AR glasses’ cost is the optical engine and optical lenses. These two elements must meet unique AR requirements: miniaturization and high transparency. The optical engine must project bright, high-definition images within a tiny space, while the optical lens (waveguide) must maintain both high transmittance and precise light guiding. Together, they account for the largest share of AR glasses’ bill of materials. Among them, the waveguide lens is the critical variable — different waveguide technologies directly determine the final pricing tier of AR products.

Four major waveguide technology routes

Current mainstream optical waveguides fall into four categories, each with different cost structures and application scenarios:

Surface Relief Grating (SRG) Waveguide – mainstream in mid-range models
waveguides, used in many AR glasses priced around 3,000–4,000 RMB, rely on lithography, etching, and nanoimprinting processes to create periodic microstructures on resin, glass, or SiC substrates. They offer wide FOV, long eye relief, high transparency, and brightness, striking a balance between user experience and technical maturity. However, expensive high-index substrates and complex fabrication processes keep costs high, limiting price reduction potential.
Array Waveguide – the high-end choice for superior colorArray waveguides, mostly priced above 4,000 RMB, use cold-processing techniques to assemble microprisms into glass substrates. Their advantage: excellent color reproduction, minimal chromatic aberration, and no light leakage. But high patent barriers and low yields in glass processing mean costs remain very high, restricting them to premium models.
Polarization Volume Grating (PVG) Waveguide – the “potential” route still maturingPVG waveguides use polarized light interference and liquid crystal alignment layers to diffract light. They are thin, light, and offer high diffraction efficiency. However, immaturity in material systems, low yields, and aging issues mean they are not yet ready for mainstream mass production.
Volume Holographic Grating (VHG) Waveguide – the key enabler of 999 RMB AR99The AR99’s price breakthrough is enabled by VHG waveguides. By exposing photosensitive materials to form periodic refractive index changes, VHG achieves efficient light coupling and out-coupling. Its strengths: low manufacturing cost, high production efficiency, high transparency, thinness, minimal light leakage, no rainbow artifacts, and single-layer full-color capability. While materials and processes continue to improve, VHG already meets core conditions for scalable mass production.

Comparison at a glance:

Array waveguides deliver top-tier color but remain heavy and costly.
SRG waveguides are mature but constrained by expensive substrates and complex processes.
PVG waveguides are promising but not stable enough for low-cost production.
VHG waveguides combine cost efficiency with scalability, making them the most suitable route for popularizing AR glasses today.

This cost optimization is precisely what allows AR99 to break into the 999 RMB price point — marking the shift from niche early adoption to mass-market accessibility.

From decades of R&D to 2025 mass production

VHG waveguides did not emerge overnight. Their roots date back to 1947, with AR-related applications beginning around 2012. Over the past decade, parameters such as field of view, transparency, and brightness efficiency have steadily improved, overcoming early issues like narrow FOV and image distortion.

By 2020, solutions such as DigiLens’s Crystal50 waveguide had achieved >80% transparency, 50° FOV, and high light efficiency, proving the commercial viability of VHG. Still, challenges persisted:

Materials: performance stability, resistance to aging, and precise refractive index control.
Full-color display: managing wavelength sensitivity and avoiding color distortion.
Production conditions: reliance on customized high-precision laser systems, stringent temperature/humidity control, and high investment costs.

In 2025, key breakthroughs finally arrived:

Domestic materials achieved higher refractive index modulation and stability, lowering costs and reducing reliance on imports.
Standardized mass production processes and advanced environmental control technologies improved yields significantly.

Together, these advances brought production costs down from “hundreds of RMB per piece” to “just over 100 RMB per piece,” enabling 999 RMB AR glasses like the AR99 to become a reality.

Nika Optics: leading the “low-cost waveguide” revolution

Founded in July 2022, Nika Optics focuses exclusively on consumer-grade VHG AR waveguides, building a full-stack capability from diffractive optical design → core material R&D → nano-fabrication. With a complete IP portfolio, Nika has tackled both “material bottlenecks” and “high-cost production” challenges.

Key milestones:

April 2024: Built China’s first dedicated VHG waveguide production line, with annual output capacity of 100,000 units. This reduced per-unit costs and validated the industrial feasibility of VHG.
June 2025: Developed a single-layer color holographic film, simplifying processes and cutting material costs while achieving performance comparable to international leaders.

Nika’s innovations include:

Proprietary high-stability exposure systems for precision and high yields.
Advanced photopolymer materials with high modulation, transparency, and efficiency (light efficiency >1500 nits/lm, brightness up to 3,000–6,000 nits with uLED).
Ultra-thin (0.4–0.6 mm) and lightweight (down to 3.5 g) waveguide lenses.
Breakthroughs in eliminating rainbow artifacts on high-index substrates.

At CIOE 2025, Nika Optics signed a strategic cooperation agreement with Xingyi Intelligent for 500,000 sets of VHG waveguides, underscoring its mass production capacity. Together, they launched the AR99, the world’s first consumer AR glasses with VHG waveguides — at just 999 RMB.

From niche to mainstream: AR’s acceleration path

For years, high prices kept AR glasses stuck in a niche. At 3,000–4,000 RMB, they were squeezed between mature smartphones above and powerful VR/MR headsets below. Consumers remained hesitant, facing both “technology unfamiliarity” and “unfriendly pricing.”

Breaking the price barrier is the key to moving from early adoption to mainstream adoption. By launching the AR99 at 999 RMB, Nika Optics, Xingyi Intelligent, and Hongshi Technology have:

Lowered the entry threshold for consumers.
Proven that “low price ≠ low quality.”
Created a reference model for cost-effective AR devices.

This milestone not only boosts AR market penetration but also sets off a virtuous cycle: higher volume drives upstream component and process innovation, which further lowers costs. Ultimately, it accelerates the entire AR industry’s path to scale and ecosystem maturity.

✅ In short: the AR99 is not just a product — it’s a signal that the era of mass-market AR glasses has begun.

*The RMB 999 AR glasses mentioned in the article are currently only available in the domestic Chinese market. An upgraded version will be available for overseas markets later.