Goldman Sachs Outlook for 2026 Greater China Tech Trends: ASIC Becomes the Core Incremental Driver for AI Servers, Optical Modules Move Towards 1.6T, and Apple Supply Chain Leads in Smartphones...

Recently, Goldman Sachs released its research report "Greater China Technology Industry Outlook 2026." Focusing on three main themes—AI infrastructure upgrades, innovation in consumer electronics form factors, and semiconductor localization—the report systematically reviews the ten most noteworthy technology trends for 2026 and points out that the rising penetration of ASIC AI servers and changes in iPhone form factors will be the core drivers behind the growth of the industry chain.

Goldman Sachs believes that the technology industry in 2026 will show significant structural differentiation: AI-related infrastructure, advanced process semiconductors, and the Apple industry chain are expected to maintain medium to high-speed growth, while traditional PCs, some telecom and OSAT segments will face slowing growth pressure. Investment opportunities will come more from niche tracks and supply-demand mismatches, rather than from the overall industry beta.

Within Greater China, Goldman Sachs is particularly optimistic about AI servers, optical modules, cooling, advanced PCBs, semiconductor equipment and materials, as well as the high-end mobile phone supply chain revolving around the foldable iPhone. The outlook remains positive for leading enterprises with technological barriers and scale advantages.

1. AI Servers Enter a Stage of Platform Diversification, ASIC Becomes the Core Incremental Driver

Goldman Sachs believes that by 2026, AI servers will move from being dominated by a single GPU platform to a stage of parallel development of GPU and ASIC. As cloud providers and large tech companies place increasing demands on computing efficiency, energy consumption, and total cost of ownership, the advantages of ASIC solutions in specific training and inference scenarios are becoming more prominent.

The report points out that by 2026, ASIC penetration in AI servers will increase significantly, and rack-level AI server shipments will grow rapidly, driving server architecture towards higher integration and power density. This shift not only increases the value of a single machine but also significantly raises demand for high-speed interconnect, cooling, and power systems.

2. High-Speed Optical Interconnect Continues to Evolve, Transition from 800G to 1.6T Becomes a Certainty

As computing scale continues to expand, interconnect capabilities within and between data centers are becoming key factors restricting AI cluster efficiency. Goldman Sachs points out that,as AI servers scale from node-level to rack-level and cluster-level, demands for bandwidth, latency, and energy consumption increase in tandem, driving network architecture upgrades 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 a surge in high-speed optical modules in 2026. Optical interconnect has shifted from a "supporting segment" to a core part of AI infrastructure.

3. Cooling System Technology Upgrade, Liquid Cooling Penetration Continues to Increase

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

Liquid cooling not only improves cooling efficiency, but also places higher demands on system structure, power supply systems, and maintenance, turning cooling from a cost item into a technical barrier. This leads to a systematic increase in the value of cooling-related components for each server.

4. Server ODM Market Stabilizes, Platform Capability Determines Long-Term Competitiveness

The growing complexity of AI servers has deepened customer reliance on ODM vendors. Goldman Sachs believes that future competitive advantage will no longer come from cost control alone, but rather from multi-chip platform adaptation, fast delivery capabilities, and capacity layout under geopolitical factors.

Leading ODMs with advanced manufacturing capabilities and deep, long-term service for cloud providers will continue to dominate AI server orders, while opportunities for small and medium-sized vendors are relatively limited, and industry concentration is expected to rise further.

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

Goldman Sachs expects that the global PC market will continue to face growth pressure in 2026. The previous refresh cycle driven by pandemic-related demand and operating system upgrades is gradually coming to an end, and rising memory prices on the cost side are also putting some pressure on end-user demand.

While the AI PC concept brings some functional differentiation, its impact on overall sales is moderate.Against this backdrop, leading manufacturers with strong brand, scale effects, and channel control will demonstrate greater profit resilience, while the low-end and white-label markets will face more pronounced pressure.

6. iPhone Enters a Cycle of Continuous Form Factor Innovation, Foldable Models Become Key Variable

Goldman Sachs sees changes in the iPhone form factor as one of the most important catalysts in the consumer electronics sector for 2026. From ultra-thin designs to foldable forms and subsequent anniversary models, continuous innovation in appearance and structure is expected to reshape the logic for user device upgrades.

Historical experience shows that significant changes in iPhone form factors often drive a clear rebound in replacement demand. The foldable iPhone not only increases the product's unit price but also raises the requirements for screens, structural parts, batteries, and precision manufacturing. Goldman Sachs expects that,in the base case, the foldable iPhone will bring significant incremental demand to high-end components and precision manufacturing segments.

7. Smartphone Market in Mild Recovery, Premiumization and AI Functionality Drive Upgrades

Overall, smartphone shipments are unlikely to return to an era of high growth, but the product structure is undergoing profound changes. Goldman Sachs believes that a rising share of high-end models and increased penetration of foldable screens will be the main sources of industry growth.

At the same time, enhanced local AI capabilities are changing the user experience logic,AI phones are no longer just about hardware parameter upgrades, but rather systematic optimization around imaging, interaction, and efficiency scenarios. This helps increase user stickiness and product lifecycles, thereby supporting demand for high-end products.

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

AI servers and high-end consumer electronics are imposing higher requirements on PCBs and copper clad laminates, causing high-end capacity expansion to lag behind demand growth. Goldman Sachs points out that as material grades upgrade from M7/M8 to even higher specifications, related capacity expansion faces both technical and capital constraints. With limited supply and continuously rising demand, the high-end PCB and CCL industries have strong bargaining power, with room for price and profitability increases in the medium term.

9. Domestic Semiconductor Industry Enters Acceleration Phase, AI and Localization Form a Resonance

Goldman Sachs is more inclined toward a structural improvement view for the domestic semiconductor industry. As AI computing demand shifts from the cloud to the edge and industry applications, local markets continue to see growing demand for computing power, storage, and supporting chips, providing domestic semiconductor companies with more realistic and sustainable application scenarios.

At the same time, considerations of supply chain security and cost efficiency have noticeably improved downstream customers’ acceptance of domestic chips, equipment, and materials. Goldman Sachs believes that,this shift is gradually moving from "policy-driven" to "business-driven," with faster order validation, helping domestic vendors create a virtuous cycle in process, yield, and product iteration, thus propelling China's semiconductor industry into an accelerated phase with more endogenous momentum.

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

In addition to AI and consumer electronics, which have relatively high short-term certainty, Goldman Sachs is also paying attention to emerging fields with long-term growth curves. The gradual implementation of L4-level autonomous driving in Robotaxi and urban NOA scenarios will continue to drive demand for chips, sensors, and system integration.

Meanwhile,low-earth orbit satellites are entering an intensive launch and early commercialization phase, with communication standard upgrades and renewal cycles set to initiate a new technology investment theme in the medium to long term.