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Why has this not taken off? Off-the-surface gestures seem like they'd really enrich smartphone experience. I don't get why this low power proven tech has not been incorporated into phones. It's already 8 years old!
Why do you think it's not in use? Microchip calls it a "capacitive touch sensor" IC on their website. Plenty of phones have that.
Really? This one is a 3D sensor. Off-the-screen gestures. Have you seen people making gestures above the surface of their phones?

I haven't seen that. Why hasn't it happened yet?

edit: Anywho, let's check the Microchip website. They don't call it what you said. There's no capacitive touch on its page, just the title. It's all 3D e-field. I think you must have got the wrong chip. Where did you see it?

https://www.microchip.com/wwwproducts/en/mgc3130

Hope to see an wristband which recognizes hand gestures soon. Together with smartphone head tracking it could open the window to useful everyday AR.