Data centers are entering a new phase of infrastructure upgrades in 2026, feeding off generative AI under Nvidia's leadership. While silicon photonics (SiPh) and co-packaged optics (CPO) technologies are still in the deployment stage, the optical communications industry is expected to move into commercialization by 2026.

The development paths for artificial intelligence (AI) integration in smartphones are diverging as ByteDance extends its collaborations with multiple brands, while technology giants Apple Inc. and Alphabet maintain a standardized application programming interface (API) strategy. Following the December 2025 launch of the Doubao phone M153 in partnership with ZTE Corporation's Nubia, recent reports indicate that ByteDance is broadening its AI smartphone alliances to include Vivo, Lenovo Group, and Transsion.

Apple Inc. has unveiled an AI imaging technology called DarkDiff, designed to improve photo clarity in low-light conditions by integrating generative diffusion models into the camera's image signal processor (ISP). While effective in reducing blur and enhancing detail, the technology's high computational demands currently limit its deployment on consumer devices.

Taiwan's smartphone market is expected to face another challenging year in 2026, as rising device prices, extended replacement cycles, and persistent memory supply constraints limit shipment growth, even as higher average selling prices support revenue expansion.

Huawei Technologies has lifted the share of Chinese-made components in its latest premium smartphones to nearly 60% by value, underscoring how years of US export controls have accelerated domestic capabilities across key technologies. Recent teardowns show that localization has moved well beyond low-cost or peripheral parts. Huawei is now sourcing processors, memory, and displays domestically — components that were once firmly dominated by suppliers from the US, Japan, and South Korea.

As AI workloads intensify and data centre architectures evolve, optical communications vendors are positioning co-packaged optics (CPO) and silicon photonics (SiPh) as core mid- to long-term growth markets. LuxNet expects 800G products to surpass 400G as the market mainstream in 2026, with 1.6T products entering initial shipments and supporting growth over the next two to three years. TrueLight is moving into the AI high-performance computing (HPC) supply chain via continuous-wave (CW) laser foundry services and expects the foundry revenue share in 2026 to exceed 2025 levels.

Chunghwa Telecom (CHT) is expanding its AI and infrastructure footprint by establishing a shared AI exhibition space and research and development office at Kaohsiung's Pier F on December 22, 2025. The company will also assist Kaohsiung in building Taiwan's first city-level generative sovereign AI demonstration base.

Following ByteDance's early December 2025 launch of the Doubao AI Phone with Nubia, a ZTE subsidiary, Jiemian News and National Business Daily reported that the company is expanding partnerships with smartphone makers. ByteDance has been pushing AI phone collaborations with Vivo, Lenovo, and Transsion. The most direct goal is finding a compliant, stable, and sustainable system identity for AI agents.

Samsung Electronics is preparing to escalate the foldable smartphone race. Industry sources say the company plans to launch a new foldable handset, internally dubbed "Wide Fold," in autumn 2026, positioning it directly against Apple's long-anticipated foldable iPhone. If timelines hold, the two products will debut within the same launch window, setting up a rare head-to-head between the world's two largest smartphone vendors.

Taiwan's leading telecom operators are entering the second phase of 5G deployment, as the focus turns toward improved network experiences to drive user adoption.

Samsung Electronics has reportedly become the largest supplier of mobile DRAM for Apple's iPhone 17, a trend expected to continue with the upcoming iPhone 18. Industry analysts attribute this shift to SK Hynix and Micron recently focusing their production capacity on AI-targeted high-bandwidth memory (HBM), prompting Apple to rely more heavily on Samsung's ample general DRAM output to secure supply.