Goldman Sachs' recent visits to key Asian tech supply chain companies revealed that AI server demand remains robust and is expected to sustain through 2026, while traditional end markets paint a starkly different picture.

A team led by Goldman Sachs analyst James Schneider conducted on-site surveys of 24 core supply chain companies across South Korea, Japan, and other regions—major global production hubs for semiconductors, servers, memory, displays, optical components, and capital equipment.

Findings indicate AI server demand is projected to maintain strong growth through 2026, with optical networking equipment demand also exceptionally strong. DRAM supply growth remains moderate while demand continues to significantly outpace supply. Meanwhile, traditional end markets like PCs and smartphones show weak growth, with some segments even facing decline pressures.

**AI Server Boom and Optical Networking Surge** The survey shows AI server demand is expected to grow robustly through 2026 without signs of slowing. Full-rack shipments could more than double, with GPU and ASIC chip shipments growing at comparable levels—though ASIC growth is forecast to accelerate faster.

Among AI chip suppliers, Nvidia's Rubin architecture remains on track for mid-2026 production, with strong capacity ramp-up expected in the second half of the year. Suppliers highlighted Broadcom's TPU chips for Google as particularly high-demand, while other vendors show diverging trends.

Optical networking demand is exceptionally strong, driven by significant speed upgrades (transitioning from 800Gb to 1.6T) and rising prices. Broadcom's performance in this segment stands out notably.

**Memory Market Tightness and Pricing Divergence** DRAM supply growth remains modest, with demand continuing to far outstrip supply. The survey anticipates HBM blended pricing will ease before rising again, while traditional DRAM pricing is projected to surge substantially.

NAND flash market conditions have tightened noticeably and are expected to remain constrained in the medium term. Notably, reports suggest NAND secured additional enterprise SSD orders from hyperscale customers in 2026.

Semiconductor test equipment demand remains robust for AI-driven applications, primarily fueled by GPUs, ASICs, and HBM. Goldman Sachs expects Teradyne's market share position to improve.

**Traditional End Markets Struggle** In sharp contrast to AI-related sectors, traditional end markets remain sluggish. Goldman Sachs forecasts minimal unit growth or slight declines for the PC market in 2026, though AMD appears to be gaining traction in commercial PCs.

Smartphones face similar challenges, with high-end model shipments holding steady but low-end sales under significant pressure from rising input costs.

Analog and RF chip demand is improving but varies by end market—data centers show strength, industrial sectors see moderate recovery, while automotive trends remain weak.

For semiconductor capital equipment, wafer fab equipment spending is projected to rise steadily through 2026-2027, driven by DRAM and advanced logic processes. NAND spending remains subdued, and mature-node logic continues facing pressure.