Augmented reality is a set of technologies that will fundamentally change the way we interact with our environment. It represents a merging of the physical and the digital worlds into a rich, context aware and accessible user interface delivered through a socially acceptable form factor such as eyeglasses. One of the biggest challenges in realizing a comprehensive AR experience are the performance and form factor requiring new custom silicon. Innovations are mandatory to manage power consumption constraints and ensure both adequate battery life and a physically comfortable thermal envelope. This presentation reviews Augmented Reality and Virtual Reality applications and Silicon challenges.