Bob O'Donnell

Special for USA TODAY

SAN FRANCISCO — The jury may still be out on the long-term impact of virtual reality (VR)- and augmented reality (AR)-based devices, but one thing is clear: they’re driving newfound enthusiasm for core technology components.

From CPUs to GPUs, APUs to HPUs, displays and wireless chips, the potential impact of AR and VR are driving a level of excitement and vigor that hasn’t been seen in the semiconductor industry in quite some time.

AMD, Intel, nVidia, Qualcomm, ARM, Imagination Technologies and others are excitedly describing their latest innovations at last week’s Game Developer’s Conference (GDC) here in a manner that hearkens to the early days of PCs and smartphones.

Of course, given the current slowdown in PCs and tablets, as well as the forthcoming halt to smartphone growth, that’s probably to be expected. Many of these firms have been facing some difficult challenges over the last several years, so any sign of positive growth is likely to be touted with great revelry.

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But this current enthusiasm is being driven by more than just a simple distraction. The truth is, potential VR and AR applications have technical requirements that go well beyond anything that exists today. And there’s nothing that semiconductor and tech component companies love more than a real technical challenge.

Arguably, some of the current struggles for many of the major chip companies has been that the devices they power are hitting up against some of their natural performance limits. The hardest technical challenges for these devices are basically over.

Sure, everyone always wants faster, better devices. But we have reached a point where not many people care if their PC runs 10% faster, or their graphics card supports higher frame rates, or their smartphones increase their screen resolutions by 20%.

Most of our core tech devices are now good enough, and it just isn’t that exciting to talk about such incremental improvements. In fact, several of these companies started making comparisons between current devices and ones that were four or five years old because the traditional method of showing year-over-year improvements wasn’t working anymore.

The introduction of AR and VR, however, has changed the landscape. It’s as if the industry reached the top of a long staircase, turned a corner, and suddenly realized that an even longer, steeper set of steps lay before them. At AMD’s press event earlier this week, for example, it talked about the need for 1,000x and even 1,000,000x improvements. Now, some of that may be a bit grandiose, but there’s no question that a whole new set of challenges is driving renewed innovation at major chip and component companies.

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More importantly, the kind of developments that need to occur to create more realistic VR and AR experiences and more usable VR and AR devices are things that normal people can actually see and understand. If you have the opportunity to try some of today’s currently available VR hardware offerings — such as the HTC Vive, Oculus Rift, Sony Playstation VR, Microsoft HoloLens or the Samsung Gear VR (which requires a Samsung smartphone as well), well, you see what I mean.

While you can certainly get some impressive experiences, they clearly have a long way to go. Plus, some of the best ones — the HTC Vive and Oculus Rift — are tethered back to a big PC with lots of wires. Not exactly a user-friendly experience. Microsoft’s HoloLens and the newly announced and impressive-looking Sulon Q, which is powered by a new AMD CPU and Radeon R7 GPU, are wire-free, but we’re still waiting to hear on what consumer prices will be.

The key point is that, collectively, these devices both place a stake in the ground with today’s current high-end components, and offer a clear indication of a path forward. Creating the kind of super high-resolution, lightweight, wireless AR and VR devices we’d all really like to have is clearly going to take several incremental technological steps, thereby giving a clearer path forward to chip and component vendors for some time to come.

While the AR and VR worlds may be the ones that receive the most direct benefit from the innovations that these new demands require, we’re likely to enjoy peripheral benefits in both our core tech devices and completely new devices that these new components will likely inspire.

Thanks to the enthusiasm triggered by augmented reality and virtual reality, the path forward for key technology components has now been set. It will be exciting to see where these new developments finally take us.

USA TODAY columnist Bob O'Donnell is president and chief analyst of TECHnalysis Research, a market research and consulting firm that provides strategic consulting and market research services to the technology industry and professional financial community. His clients are major technology firms, including Microsoft, HP, Dell and Nvidia. You can follow him on Twitter @bobodtech.