Where are the opportunities in the Asian AI industry chain? Goldman Sachs provided three directions

AI is profoundly changing the global technology and economic landscape. From infrastructure to application scenarios, every link in the AI industry chain contains enormous investment opportunities.

As an important part of the global technology industry, Asia has great potential for the development of its AI industry chain. On the 12th, Goldman Sachs' Alvin So team released a research report that deeply analyzes AI investment opportunities in Asia and points out three directions worth paying attention to for investors.

Goldman Sachs recommends focusing on the AI application layer, the upgrade of the Apple supply chain, and the long-term potential of AI infrastructure. Goldman Sachs expects that in the next two years, profit growth in the Asian AI application field will exceed 20%, with China's AI application market expected to become one of the fastest-growing regions globally.

Additionally, the introduction of edge AI features in smart devices like the iPhone will drive a new round of upgrade cycles, bringing opportunities to related industry chains. The popularization of AI technology will lead to a sustained increase in demand for computing power and electricity, providing stable business growth for companies in the infrastructure sector.

Direction One: The Rise of the AI Application Layer

Goldman Sachs believes that the AI application layer will be a top priority for future investments. As AI technology continues to mature and costs decrease, its application scenarios are rapidly expanding. Goldman Sachs points out that the Asian market has unique advantages in the AI application field, especially in countries like China and South Korea, which have made significant progress in natural language processing (NLP), computer vision, and generative AI technologies.

Taking China as an example, internet giants like Alibaba, Tencent, and Baidu are actively laying out AI applications, from intelligent customer service to AI-assisted medical imaging analysis, from intelligent transportation to AI-driven financial risk prediction, AI technology is penetrating various industries. Goldman Sachs expects that in the next two years, profit growth in the Asian AI application field will exceed 20%, with China's AI application market expected to become one of the fastest-growing regions globally.

Moreover, physical AI refers to the integration of AI technology with the physical world to achieve intelligent control and operation. Goldman Sachs' physical AI investment portfolio covers areas such as autonomous driving, humanoid robots, and AIoT (Artificial Intelligence of Things).

Goldman Sachs points out that China is also showing strong development momentum in these areas. For example, in the field of autonomous driving, Chinese companies like BYD, XPeng, and Nio are actively researching and developing autonomous driving technology and have achieved certain results. In the humanoid robot sector, Chinese companies like Xiaomi and UBTECH are also increasing their investments, striving for breakthroughs in this field.

Direction Two: Upgrade Opportunities in the Apple Supply Chain

Apple's layout in the AI field has also brought new opportunities to the Asian industry chain. Goldman Sachs points out that the introduction of edge AI features in smart devices like the iPhone will drive a new round of upgrade cycles, bringing opportunities to related industry chains. For example, Apple's suppliers are accelerating the research and production of hardware components that support AI functions, including high-performance chips, smart sensors, and advanced cooling technologies.

Goldman Sachs recommends paying attention to Apple's suppliers in Taiwan, China. Goldman Sachs expects that in the next two years, the compound annual growth rate of profits for Apple's suppliers in Taiwan, China, will reach 21%, far exceeding Apple's growth rate of 10%.

Direction Three: Long-term Potential of AI Infrastructure

Despite the recent decline in market attention towards AI infrastructure, Goldman Sachs believes that AI infrastructure remains an important direction for long-term investment. As AI technology becomes more widespread, the demand for computing power and electricity will continue to grow, bringing stable business growth to companies in the infrastructure sector.

Goldman Sachs stated that Asia has significant advantages in the AI infrastructure field. For example, Taiwan's TSMC is continuously increasing its investment in the research and development of AI chips, and its advanced process technology will provide strong support for AI infrastructure.

Additionally, South Korea's Samsung Electronics and SK Hynix also hold important positions in the memory chip and high-performance computing chip sectors.

Goldman Sachs expects that in the next two years, the profit growth in Asia's AI infrastructure sector will reach 27%, with the semiconductor and hardware sectors performing the most prominently.