Applied Materials and EssilorLuxottica Sign Long-Term Deal to Develop AR and AI Smart Glasses
The agreement aims to speed commercialization of lightweight augmented‑reality displays by pairing EssilorLuxottica’s eyewear design with Applied’s materials and waveguide engineering.
Overview
- A long-term joint development agreement announced June 16 commits the two companies to co-develop augmented-reality displays and AI-powered smart glasses for consumer and enterprise use.
- Their R&D will focus on advanced waveguides, adaptive lens systems, and new materials that route light through thin glass to project images while keeping frames light and wearable.
- Applied Materials brings recent momentum to the deal through validated etch and deposition tools and a new $500 million Singapore plant that expand capacity for optics and semiconductor components.
- Sell-side analysts raised price targets on Applied in mid-June, with Barclays lifting its target to $590 and Citi to $710, citing stronger memory-driven wafer fab equipment demand that could widen the company’s addressable market.
- Investors should note risks that could limit upside: Applied’s valuation is at record highs, free cash flow has some year-over-year pressure, and recent insider stock sales have prompted governance and timing questions.