In Parallels Desktop on a Mac with Apple M1 chip, all supported operating systems use the Apple M1 chip Unified Memory Architecture (UMA) for graphics purposes. This memory architecture is a unique Apple approach to system design and implies having one unified memory for both CPU and GPU. In other words, there is no dedicated graphics memory on a Mac with Apple M1 chip. Using the system memory for graphics is the most efficient way that provides the best experience working with virtual machines on Mac computers with Apple M1 chip.
Mac with Apple M1 chip - no dedicated graphics memory:
Mac with Intel-based processor - graphics adapter with dedicated memory:
Increase video memory
If you have some graphics performance issues, or applications complaining about insufficient resources, changing video memory value can help but it can also make the situation even worse. The recommended steps that might help in such cases are:
1. Open the virtual machine configuration > Hardware > CPU & Memory > increase both RAM value and the number of virtual CPUs within the recommended range.
2. If you're playing a game, try lowering display resolution and turning off demanding application settings.
Note: Since Mac's resources are limited, the RAM value assigned to a virtual machine should not be higher than the recommended values. For example, one can assign 6 GBs to a virtual machine running on a Mac with 8 GBs of RAM. But usually, there are some applications running on the Mac side (ones can be found in Activity Monitor) that also compete for resources. As a result, a memory overcommitment might happen and overall performance will decrease exponentially.
Parallels Desktop uses system memory for graphics and manages the amount of video memory allocated to the virtual machine by itself based on the virtual machine's needs. This is the best approach because all guest operating systems supported by Parallels Desktop on M1 Mac computers can use system memory for graphics purposes.
A virtual machine does use the resources of the Apple M1 graphics processing unit (GPU) integrated into the Apple M1 System on a Chip (SoC), though indirectly. The virtual machine relies on the macOS graphics application programming interfaces, or APIs (Metal, OpenGL) but it doesn't have direct access to the graphics processing unit (GPU) or its memory. Guest OS video memory is allocated from Mac's RAM and acts more as a transitional buffer to pass the volumes of data between a virtual machine operating system APIs (Direct3D, OpenGL) and macOS APIs rather than actual storage. So, the amount of virtual graphics memory doesn't need to match physical GPU memory because the usage scenarios are different.