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Leading fabless semiconductor solution provider Himax Technologies, Inc. (HIMX - Free Report) announced a collaboration with Lumus, a leading producer of Augmented Reality glasses, to continue with their efforts toward developing the next generation of smart glasses.

Through the smart glasses, which are poised to set new standards in image quality and performance, the two companies are hoping to capitalize on the phenomenal growth expected in the niche wearable technology market.

Lumus makes ultra-thin, see-through optics that facilitate natural-looking wearable displays. The collaboration is seeking to integrate Lumus’ optics with Himax's distinctive LCOS technology to provide the level of brightness crucial for see-through Augmented Reality.

Himax’s microdisplay, customized for smart glasses, merges seamlessly with Lumus’ transparent display, and will generate the perfect resolution for true Augmented Reality and hands-free wearable computing. Moreover, Himax's capacity for high volume production and its futuristic technological applications will support the initiative.

For last several years, the two companies have been teaming up for work in the field of combat aviation, and have produced market-leading helmet-mounted displays. Building up on their proven solutions and manufacturing capabilities, the companies are now joining forces to turn wearable displays into mainstream consumer products.

The wearable technology market, with products ranging from smart glasses to fitness bands to watches, is at a nascent stage with radical implications for a number of sectors, like fitness, healthcare, medical, industrial and military. A growing number of technology giants, like Google Inc. (GOOGL - Free Report) and Apple Inc. (AAPL - Free Report) , are betting high on this market’s potential and are developing wearable technology products.

Per a report from Transparency Market Research, the wearable technology market is poised to reach $5.8 billion by 2018. With this collaboration, Himax is hoping to leverage the growth potential of this budding market.

Himax presently carries a Zacks Rank #3 (Hold). A better-ranked stock in the industry is Silicon Motion Technology Corp. (SIMO - Free Report) , sporting a Zacks Rank #1 (Strong Buy).

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