Artificial intelligence terminals are expected to catalyze a valuation recovery in the consumer electronics sector, with the industry chain poised to enter a new growth cycle. The integration of AI technology with consumer hardware is accelerating, pushing core product categories like smartphones, PCs, and glasses into a new competitive phase centered on system-level AI capabilities, on-device computing power, and application ecosystems.

GLMS SEC highlights that the ongoing World Artificial Intelligence Conference in Shanghai, featuring major players like Lenovo and Honor showcasing new AI PCs, AI phones, and AI glasses, marks a critical period for the accelerated implementation of AI in hardware.

AI Smartphones and PCs Enter a Structural Upgrade Cycle, with Premiumization as the Core Theme

Influenced by rising memory costs, global smartphone shipments are forecast to decline by 8.4% in 2026. However, shipments of models priced above $400 are still expected to grow by 5.7%, as AI features become a key driver for premiumization. For AI PCs, standards like Microsoft's Copilot+ PC, which sets an NPU computing threshold above 40 TOPS, are pushing upgrades in NPU/CPU/GPU heterogeneous architectures and memory configurations, making high-end and commercial AI PCs a key growth area.

AI Glasses Shipments Set for Growth, with SoC as the Core Value Component

Global shipments of AI glasses are projected to surpass ten million units in 2026 and reach 26 million by 2028. The product form is evolving towards integrated AI and AR, with the System-on-Chip accounting for approximately 34% of the Bill of Materials cost, representing the largest single hardware component and rapidly iterating towards low-power, high-performance NPUs.

On-Device SoC Chips Poised for Value Reassessment, Domestic Manufacturers Accelerate Product Iteration

The proliferation of AI terminals is driving SoC upgrades from traditional audio/video processing towards high NPU算力, low power consumption, and strong Image Signal Processing capabilities. Domestic SoC manufacturers are transitioning from mature to advanced process technologies and from single-function to multimodal AI platforms.

Investment Recommendations

With AI empowering end devices, consumer electronics, smart cockpits, embodied intelligence, and upstream component suppliers are positioned to benefit. The firm suggests focusing on: 1) Brand and ODM manufacturers; 2) Upstream supply chain companies; and 3) SoC providers. It also recommends companies expected to benefit significantly from the AI device trend, including specific SoC and ODM manufacturers.

Risk Factors

Key risks include weaker-than-expected demand for AI terminals, rising costs for memory and core components, intensifying competition and rapid technological iteration in the SoC industry, and uncertainties surrounding AI technology standards and ecosystem implementation.