Goldman Sachs Outlook on 2026 Greater China Technology Trends: ASIC Becomes the Incremental Core of AI Servers, Optical Modules Move Towards 1.6T, Apple Supply Chain Leads in Smartphones

Recently, Goldman Sachs released the "2026 Outlook for the Technology Industry in Greater China" research report. The report focuses on three main themes: the upgrade of artificial intelligence infrastructure, innovation in consumer electronics, and the localization of semiconductors. It systematically outlines the top ten technology trends to watch in 2026 and points out that the increased penetration of ASIC AI servers and changes in iPhone form factors will become the core drivers of growth in the industry chain.

According to the Chasing Wind Trading Desk, Goldman Sachs believes that the technology industry will show significant structural differentiation in 2026: AI-related infrastructure, advanced process semiconductors, and the Apple supply chain are expected to maintain medium to high-speed growth, while traditional PCs, certain telecommunications, and testing and packaging segments will face pressure from slowing growth. Investment opportunities will increasingly arise from niche segments and supply-demand mismatches rather than the overall industry beta.

Within Greater China, Goldman Sachs is particularly optimistic about AI servers, optical modules, cooling systems, advanced PCBs, semiconductor equipment and materials, as well as the high-end mobile phone supply chain surrounding the foldable iPhone, while maintaining a positive outlook on leading companies with technological barriers and scale advantages.

I. AI Servers Entering a Stage of Platform Diversification, ASIC Becomes the Core Increment

Goldman Sachs believes that by 2026, AI servers will transition from being dominated by single GPUs to a stage where GPUs and ASICs develop in parallel. As cloud vendors and large technology companies continue to raise their requirements for computing efficiency, energy consumption ratios, and total ownership costs, the advantages of ASIC solutions in specific training and inference scenarios become increasingly prominent.

The report indicates that by 2026, the penetration rate of ASICs in AI servers will significantly increase, while the shipment volume of rack-level AI servers will grow rapidly, driving server architecture towards higher integration and power density. This change not only enhances the overall value of the machine but also significantly raises the demand for high-speed interconnects, cooling, and power systems.

II. High-Speed Optical Interconnects Continue to Evolve, Transition from 800G to 1.6T Becomes a Certainty

Against the backdrop of continuous expansion in computing power, the interconnect capabilities within and between data centers are becoming key factors limiting the efficiency of AI clusters. Goldman Sachs points out that AI servers are expanding from node-level to rack-level and cluster-level, which synchronously raises the requirements for bandwidth, latency, and energy consumption, driving network architecture to accelerate the upgrade from 400G to 800G and even 1.6T.

At the same time, new technological paths such as silicon photonics and CPO are gradually maturing, laying the foundation for high-speed optical modules to see significant growth in 2026. Optical interconnects have shifted from being a "supporting element" to a core component of AI infrastructure.

III. Upgrades in Cooling System Technology, Liquid Cooling Penetration Rate Continues to Rise

As the power consumption and computing density of individual machines continue to rise, traditional air cooling solutions are gradually approaching their physical limits. Goldman Sachs expects that by 2026, the adoption rate of liquid cooling solutions in ASIC AI servers will significantly increase, evolving from early localized applications to more systematic overall solutions.

Liquid cooling not only enhances cooling efficiency but also imposes higher requirements on the overall machine structure, power systems, and operational maintenance methods, transforming cooling systems from a cost item into one of the technological barriers. This leads to a systematic increase in the value related to cooling for individual servers

4. The ODM Landscape for Servers Stabilizes, Platform Capabilities Determine Long-Term Competitiveness

The increasing complexity of AI servers has deepened customers' reliance on ODM manufacturers. Goldman Sachs believes that future competitive advantages will no longer stem from single cost control but from multi-chip platform adaptability, rapid delivery capabilities, and capacity layout under geopolitical contexts.

Leading ODMs with advanced manufacturing capabilities and long-term deep service for cloud vendors will continue to dominate AI server orders, while the participation space for small and medium-sized manufacturers will be relatively limited, and industry concentration is expected to further increase.

5. Growth Momentum in the PC Industry Slows, Structural Differentiation Intensifies

Goldman Sachs expects that the global PC market will still face growth pressure in 2026. The update cycle driven by pandemic demand and operating system upgrades is gradually coming to an end, while rising memory prices on the cost side are also exerting some suppression on end demand.

Although the AI PC concept brings differentiation at the functional level, its effect on overall sales growth is becoming mild. In this context, leading manufacturers with brand advantages, scale effects, and channel control will demonstrate stronger profit resilience, while the low-end and white-label markets will face more significant pressure.

6. iPhone Enters a Continuous Form Innovation Cycle, Foldable Models Become Key Variables

Goldman Sachs views the changes in iPhone form factors as one of the most important catalysts in the consumer electronics field in 2026. From ultra-thin designs to foldable forms, and subsequently to anniversary models, continuous innovations in appearance and structure are expected to reshape user upgrade logic.

Historical experience shows that when the iPhone undergoes significant form changes, it often leads to a noticeable rebound in upgrade demand. The foldable iPhone not only increases the product price but also raises higher requirements for screens, structural components, batteries, and precision manufacturing processes. Goldman Sachs expects that under the baseline scenario, the foldable iPhone will bring significant increments to high-end components and precision manufacturing sectors.

7. The Smartphone Market Shows Mild Recovery, Upgrades Driven by Premiumization and AI Features

Overall, smartphone shipments are unlikely to return to the high-growth era, but the product structure is undergoing profound changes. Goldman Sachs believes that the increase in the proportion of high-end models and the rise in foldable screen penetration will become the main sources of growth in the industry.

At the same time, the enhancement of local AI capabilities is changing the user experience logic. AI smartphones are no longer just hardware parameter upgrades but involve systematic optimization around imaging, interaction, and efficiency scenarios, which helps enhance user stickiness and product lifecycle, thereby supporting demand for high-end products.

8. Supply and Demand for High-End PCBs and CCLs Tighten, AI Drives Long-Term Prosperity

AI servers and high-end consumer electronics have raised higher specifications for PCBs and copper-clad laminates, leading to a significant lag in high-end capacity expansion compared to demand growth. Goldman Sachs points out that as material grades upgrade from M7/M8 to higher specifications, the expansion of related capacities faces dual constraints of technology and capital. Limited supply and continuously growing demand give the high-end PCB and CCL industry strong bargaining power, with price and profitability having upward potential in the medium term

9. Domestic Semiconductors Entering an Accelerated Phase, AI and Localization Resonating

Goldman Sachs' judgment on the domestic semiconductor industry leans more towards structural improvement. As AI computing demand spreads from the cloud to the edge and industry applications, the local market's demand for computing power, storage, and supporting chips continues to grow, providing domestic semiconductor companies with more realistic and sustainable application scenarios.

At the same time, considerations of supply chain security and cost efficiency have significantly increased downstream customers' acceptance of domestic chips, equipment, and materials. Goldman Sachs believes that this change is gradually shifting from "policy-driven" to "business-driven," with an accelerated pace of order verification, helping local manufacturers form a positive cycle in process, yield, and product iteration, thereby driving China's semiconductor industry into a more intrinsically motivated accelerated phase.

10. Autonomous Driving and Low Earth Orbit Satellites Open Up Medium to Long-Term Growth Space

In addition to the short-term certainty of AI and consumer electronics, Goldman Sachs is also focusing on emerging fields with long-term growth curves. The gradual implementation of Level 4 autonomous driving in Robotaxi and urban NOA scenarios will continue to drive demand for chips, sensors, and system integration.

At the same time, low Earth orbit satellites are entering a phase of intensive launches and early commercialization, with communication specifications upgrading and renewal cycles starting, which is expected to form a new main line of technology investment in the medium to long term.