Goldman Sachs recently released its research report titled "Greater China Technology 2026 Outlook." The report systematically outlines the top ten most noteworthy technology trends for 2026, centered around three main themes: artificial intelligence infrastructure upgrades, consumer electronics form factor innovation, and semiconductor localization. It highlights that the increased penetration of ASIC-based AI servers and changes to the iPhone's form factor will be the core drivers of supply chain growth.
According to Goldman Sachs, the technology sector in 2026 will exhibit significant structural divergence: AI-related infrastructure, advanced-node semiconductors, and the Apple supply chain are expected to maintain medium-to-high growth rates, while traditional PCs and certain telecommunications and packaging & testing segments will face growth deceleration pressures. Investment opportunities will increasingly stem from niche segments and supply-demand mismatches, rather than broad sector-wide beta.
Within the Greater China region, Goldman Sachs holds a particularly positive view on AI servers, optical modules, thermal solutions, advanced PCBs, semiconductor equipment and materials, as well as the high-end smartphone supply chain centered on a foldable iPhone. The firm maintains a favorable outlook on leading companies possessing significant technological barriers and scale advantages.
AI servers are entering a phase of platform diversification, with ASICs becoming the core driver of incremental growth. Goldman Sachs believes that by 2026, AI servers will transition from a stage dominated by GPUs to one of parallel development for GPUs and ASICs. As cloud providers and large technology companies place greater emphasis on computational efficiency, power consumption ratios, and total cost of ownership, the advantages of ASIC solutions in specific training and inference scenarios are becoming increasingly prominent.
The report points out that by 2026, the penetration rate of ASICs in AI servers is expected to increase significantly. Concurrently, the shipment volume of rack-scale AI servers will grow rapidly, driving server architecture evolution towards higher integration and greater power density. This shift not only elevates the value per unit but also substantially increases demand for high-speed interconnects, thermal management, and power supply systems.
High-speed optical interconnect technology continues to evolve, with the transition from 800G to 1.6T emerging as a definitive trend. Against the backdrop of continuously expanding computing scale, interconnect capabilities within and between data centers are becoming a critical factor limiting the efficiency of AI clusters. Goldman Sachs notes that the expansion of AI servers from the node level to the rack and cluster level simultaneously raises requirements for bandwidth, latency, and energy consumption, accelerating the upgrade of network architectures from 400G to 800G and even 1.6T.
Simultaneously, new technological pathways such as silicon photonics and Co-Packaged Optics (CPO) are gradually maturing, laying the foundation for the high-volume adoption of high-speed optical modules by 2026. Optical interconnects have transformed from a supporting component into a core element of AI infrastructure.
Thermal management systems are undergoing technological upgrades, with the penetration rate of liquid cooling continuing to rise. As single-unit power consumption and compute density persistently increase, traditional air-cooling solutions are gradually approaching their physical limits. Goldman Sachs anticipates that the adoption rate of liquid cooling solutions in ASIC-based AI servers will see a marked increase by 2026, evolving from early localized applications to more systematic, holistic solutions.
Liquid cooling not only enhances thermal efficiency but also imposes higher demands on overall server structure, power systems, and operational maintenance, transforming thermal management from a cost item into a technological barrier. This shift leads to a systematic increase in the value attributed to thermal solutions per server.
The server ODM (Original Design Manufacturer) landscape is stabilizing, with platform capabilities determining long-term competitiveness. The rising complexity of AI servers is deepening customer reliance on ODM manufacturers. Goldman Sachs believes future competitive advantage will stem less from pure cost control and more from capabilities in multi-chip platform adaptation, rapid delivery, and capacity layout against a geopolitical backdrop.
Leading ODMs possessing advanced manufacturing capabilities and long-term, deep partnerships with cloud providers are expected to maintain a dominant position in AI server orders. Participation opportunities for smaller and medium-sized manufacturers are likely to be more constrained, potentially leading to further industry consolidation.
Growth momentum in the PC industry is slowing, with structural divergence intensifying. Goldman Sachs expects the global PC market to continue facing overall growth pressures in 2026. The replacement cycle previously driven by pandemic demand and operating system transitions is gradually concluding, while rising memory costs are exerting some pressure on end-demand.
Although the concept of AI PCs offers differentiation at a functional level, its impact on driving overall sales volume is expected to be moderate. In this context, leading manufacturers with brand advantages, economies of scale, and strong channel control are likely to demonstrate greater profit resilience, while the low-end and white-label markets will face more significant pressure.
The iPhone is entering a continuous cycle of form factor innovation, with foldable models becoming a key variable. Goldman Sachs views changes to the iPhone's form factor as one of the most important catalysts in the consumer electronics space 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 behind user device replacement.
Historical experience suggests that significant form factor changes in the iPhone often lead to a noticeable recovery in replacement demand. A foldable iPhone would not only increase the product's average selling price but also impose higher requirements on displays, structural components, batteries, and precision manufacturing. Under a base-case scenario, Goldman Sachs expects a foldable iPhone to generate significant incremental demand for high-end components and precision manufacturing.
The smartphone market is experiencing a mild recovery, with premiumization and AI features driving upgrades. Overall, smartphone shipment volumes are unlikely to return to the high-growth era, but the product mix is undergoing profound changes. Goldman Sachs believes that the increasing proportion of premium models and the rising penetration of foldable screens will be the primary sources of industry growth.
Simultaneously, the enhancement of on-device AI capabilities is altering the user experience paradigm. AI-powered smartphones are no longer just about hardware specification upgrades but represent a systemic optimization around imaging, interaction, and efficiency scenarios. This helps improve user stickiness and product lifecycle, thereby supporting demand for high-end products.
The supply-demand balance for high-end PCBs and CCL remains tight, with AI driving long-term positive momentum. The higher specification requirements for PCBs and copper-clad laminate (CCL) from AI servers and high-end consumer electronics are causing capacity expansion for high-end products to lag noticeably behind demand growth. Goldman Sachs points out that as material grades upgrade from M7/M8 to even higher specifications, related capacity expansion faces both technological and capital constraints. Supply constraints coupled with sustained demand growth grant the high-end PCB and CCL industry strong pricing power, with potential for price and profitability increases over the medium term.
Domestic semiconductor production in China is entering an acceleration phase, with AI and localization creating synergistic effects. Goldman Sachs's assessment of China's domestic semiconductor industry leans towards structural improvement. As AI computing demand diffuses from the cloud to the edge and various industry applications, the local market's demand for computing power, memory, and supporting chips continues to grow, providing domestic semiconductor companies with more tangible and sustainable application scenarios.
Concurrently, considerations around supply chain security and cost efficiency are significantly increasing downstream customers' acceptance of domestic chips, equipment, and materials. Goldman Sachs believes this shift is gradually moving from being "policy-driven" to "commercially-driven." The accelerated pace of order validation helps domestic manufacturers establish a virtuous cycle in process technology, yield rates, and product iteration, thereby propelling China's semiconductor industry into an acceleration phase with stronger endogenous momentum.
Autonomous driving and low-earth orbit satellites open up medium to long-term growth avenues. Beyond the near-term certainties of AI and consumer electronics, Goldman Sachs is also monitoring emerging fields with long-term growth trajectories. The gradual deployment of L4 autonomous driving in Robotaxi and urban NOA scenarios will continuously drive demand for chips, sensors, and system integration.
Simultaneously, the low-earth orbit satellite sector is entering an initial phase of intensive launches and commercialization. Communication specification upgrades and the initiation of replacement cycles are expected to form new main themes for technology investment over the medium to long term.
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