Assessment of AI-technology supply chain landscape and critical factors in Asia affecting regional data center infrastructure development.

Goldman Sachs' James Schneider and his team visited two dozen companies deeply embedded in Asia's IT supply chain across Taiwan, Korea, and Japan — the global production capitals for semiconductors, servers, memory, displays, optics, and capital equipment. These channel checks serve as critical early signals and leading indicators for gauging the AI bubble and global demand for technology, particularly in North America and Europe. The visits yielded ten key takeaways on market conditions across multiple segments.

AI server demand remains robust with no signs of slowing in 2026, with full-rack shipments potentially more than doubling alongside similar growth levels in GPU and ASIC production, though ASIC shipment growth is expected to accelerate faster. Nvidia's Rubin is on track for mid-2026 production with a strong 2H26 volume ramp, while suppliers report very strong traction for Broadcom's TPU for Google despite mixed trends for other suppliers. Optical networking demand is extremely strong, driven by significant speed upgrades — the transition to 800Gb and eventually 1.6T — and pricing uplift, with Broadcom datapoints particularly strong.

Semiconductor capital equipment expectations for 2026 and 2027 continue to increase, led by DRAM and leading-edge logic, while NAND spending remains muted and trailing-edge logic remains under pressure. Semi test shows robust demand for AI-driven applications driven by GPU, ASIC, and HBM, with Teradyne's market share position expected to improve. DRAM supply growth remains moderate while demand continues to materially exceed supply; blended HBM pricing is expected to moderate before increasing again, while conventional DRAM pricing is expected to increase substantially.

NAND supply and demand conditions have tightened materially and are expected to remain tight in the medium term, with SanDisk appearing to have won an additional hyperscaler customer for eSSDs in 2026. Analog and RF demand is improving but varies by end market, with strength in datacenter, moderate improvement in industrial, and sluggish trends in automotive. PC expectations are for very muted unit growth or modest declines in 2026, with AMD appearing to gain traction in commercial PCs, while high-end smartphone unit shipments remain solid but low-end market volumes are significantly pressured by rising input costs.