Micro-light-emitting diodes (µLEDs) are gathering significant interest as a technology for emerging micro-displays. However, µLEDs encounter numerous obstacles, including size-dependent efficiency loss, poor efficiency of red µLEDs, and challenges associated with the mass transfer and integration of full-color µLEDs. These issues become more acute in ultra-small µLEDs (<5 µm), which were required by the augmented reality (AR) displays. Here, we discuss the principal challenges faced by µLEDs and explore the possible solutions. We highlight recent advances in InGaN-based RGB µLEDs tailored for AR displays. In particular, we discuss the advancements in ultra-small InGaN µLEDs scaled down to 1 µm, the developments in InGaN red µLEDs, and the implementation of tunnel junction-based cascaded InGaN µLEDs for monolithic integration.