Goldman Sachs Asia Research: The Real Temperature Difference in Supply Chains Amidst the AI Frenzy

Goldman Sachs recently discovered that the demand for AI servers remains strong and is expected to continue until 2026 after visiting core enterprises in the Asian technology supply chain. However, the traditional terminal market presents a starkly different picture.

Goldman Sachs analyst James Schneider led a team to conduct on-site research at 24 core supply chain enterprises in South Korea, Japan, and other regions. These areas are major production bases for global semiconductors, servers, memory, displays, optical devices, and capital equipment.

The research results show that the demand for AI servers is expected to maintain strong growth through 2026, the demand for optical network equipment is also extremely strong, and the supply growth in the DRAM market remains moderate, with demand continuing to significantly exceed supply. In contrast, the traditional terminal markets such as PCs and smartphones are experiencing weak growth, with some sub-sectors even facing downward pressure.

Strong Demand for AI Servers, Optical Networks Experience Surge

The research indicates that the demand for AI servers is expected to continue strong growth through 2026, with no signs of slowing down. The total rack shipment volume may more than double, with GPU and ASIC chip shipment growth levels being comparable, but the growth rate for ASIC shipments is expected to be faster.

In terms of AI chip suppliers, NVIDIA's Rubin architecture is scheduled to go into production in mid-2026, with strong capacity ramp-up expected in the second half of 2026. Suppliers specifically noted that the demand for TPU chips provided by Broadcom to Google is very strong, while other suppliers show different trends.

The demand for optical network equipment is performing extremely well, mainly benefiting from significant speed upgrades (transitioning from 800Gb to ultimately 1.6T) and price increases. Broadcom's data performance in this field is particularly outstanding.

Tension in Supply and Demand in the Storage Market, Pricing Trends Diverge

The supply growth in the DRAM market remains moderate, with demand continuing to significantly exceed supply. The research anticipates that HBM mixed pricing will ease before rising again, while traditional DRAM pricing is expected to rise significantly.

The supply-demand situation in the NAND flash memory market has tightened noticeably and is expected to remain tense in the medium term. Notably, there are reports that flash memory won additional enterprise-level SSD orders from ultra-large-scale customers in 2026.

Demand for semiconductor testing equipment in AI-driven applications remains strong, primarily driven by GPUs, ASICs, and HBM. Goldman Sachs expects Teradyne's market share position to improve.

Weak Growth in Traditional Terminal Markets such as PCs

In stark contrast to the hot AI-related fields, the traditional terminal market is performing weakly. Goldman Sachs expects very slight unit growth or a small decline in the PC market by 2026. However, AMD seems to have gained more market appeal in the commercial PC sector.

The smartphone market is also facing challenges. High-end model shipments remain stable, but sales in the low-end market have come under significant pressure due to rising input costs.

Demand for analog and RF chips is improving, but varies by terminal market. Data center demand is strong, industrial sectors show moderate improvement, while trends in the automotive sector remain weak.

In terms of semiconductor capital equipment, wafer fab equipment spending is expected to continue increasing in 2026 and 2027, primarily driven by DRAM and advanced logic processes NAND spending remains sluggish, and mature process logic technology continues to face pressure