Decoding the Value Reconstruction of the Industrial Chain under the Trend of Edge AI
1. Detailed Explanation of Three Core Logics
Logic One: The Industrial Trend is Clear and Irreversible
The rise of edge AI is a profound transformation, with its trend already established and accelerating.
At its core, it is a revolution in interaction: the essence of edge AI lies in replacing traditional graphical user interfaces (GUIs) and touch screens with natural language interactions. Historically, every innovation in human-computer interaction paradigms (such as from command lines to GUIs, and then to smartphone touch screens) has spawned a decade-long industrial opportunity, and edge AI is expected to usher in the next golden era.
The technological foundation is maturing:
The launch of “Apps inside ChatGPT” by OpenAI, along with enterprise-level AI platforms from giants like Google and Microsoft, indicates that the multi-functional orchestration capabilities of large language models (LLMs) are maturing.
AI can understand and execute user instructions more complexly and smoothly, laying the groundwork for integration into hardware devices.
The integration of the software ecosystem is advancing beyond expectations, such as Salesforce integrating its platform into ChatGPT, accelerating the deployment of AI applications.
The critical window period has been clearly defined:
OpenAI’s software platform (“Apps inside ChatGPT”) is expected to launch in the second half of 2025, with its AI hardware products anticipated to be released in the second half of 2026.
Therefore, the first half of 2026 will be a crucial window for traditional device manufacturers (such as those producing smartphones, PCs, headphones, etc.) to achieve breakthroughs in AI and seize market opportunities. Missing this window will significantly increase the difficulty of catching up in the future.
Logic Two: The Core Competitiveness of China’s Electronics Manufacturing Industry Remains Strong
In the context of Sino-U.S. trade frictions, the advantages of the Chinese supply chain remain solid.
Tariff costs are borne by brand owners: any potential tariffs imposed by the U.S. will be borne by brands like Apple, and will not directly affect the profitability of Chinese supply chain manufacturers. Additionally, Apple’s previous substantial investments in the U.S. may allow it to obtain tariff exemptions.
The value of the supply chain is irreplaceable: China’s electronics manufacturing industry has accumulated irreplaceable engineering capabilities, economies of scale, and rapid response capabilities by following top clients like Apple. Whether the future involves Apple or other innovations in edge AI hardware, the Chinese supply chain will be an indispensable “backbone”.
Recognition from emerging AI giants: OpenAI’s choice to collaborate with Chinese manufacturers like Luxshare Precision and Lens Technology to develop its AI hardware is a strong endorsement of the capabilities and status of the Chinese supply chain.
Logic Three: Market Expectations are Low, Valuations Have a Safety Margin
Current stock prices do not fully reflect the enormous potential of edge AI.
Valuation levels are relatively low: taking Luxshare Precision as an example, its market capitalization corresponds to a price-to-earnings (P/E) ratio of less than 20 times for next year (2026), which is at a historically low level.
Profit forecasts have room for upward revision: as demand for computing power in edge AI grows, the earnings per share of supply chain companies have further upward flexibility.
Intensive catalysts: From the end of 2025 to 2026, a large number of edge AI software and hardware products will be released, continuously catalyzing market sentiment. Current valuations indicate that market expectations remain very low, providing a high safety margin and investment opportunity.
2. Industry Catalytic Events Overview (Recent to 2026)
A series of upcoming events serve as evidence of the industry entering a “concentrated catalyst” phase:
November-December 2025:
Alibaba: Launch of the first self-developed AI glasses “Quark”.
Huawei: Sale of AI companion robots;
Qianwen APP promotes the iteration of intelligent agent functions, integrating with scenarios like Taobao.
ByteDance: Release of AI smartphones.
Volcano Engine: Hosting the FORCE Power Conference.
Li Auto: Launch of AI glasses, with a stock of 200,000 units.
Samsung, Baidu, 360, etc.: Release of AI glasses.
2026: ByteDance PICO: Release of new products.
OpenAI: Expected to release its AI hardware products.
3. In-Depth Analysis of the Industrial Chain and Companies
The entire industrial chain of edge AI hardware from design, manufacturing to key components can be divided into several core links, with each company playing an indispensable role.
First Link: Complete Machine Design and System Integration (Strategic High Ground and End Brand)
This link represents the final form of AI hardware, directly facing consumers, with the highest value and being the center of innovative integration.
Luxshare Precision: Leading platform-type precision manufacturing company. Its core role is system-level OEM. It not only provides connectors and modules for Apple but is also the core OEM for AI hardware (such as OpenAI’s first hardware). Its strong precision manufacturing, vertical integration, and yield control capabilities make it a strategic partner of choice for any brand launching complex AI hardware.
Goertek: Leading company in acoustics and wearable devices. Its traditional advantages lie in acoustic modules (microphones, speakers) and VR/AR complete machine OEM. In the era of edge AI, smart headphones, AI glasses, and AR/VR headsets will become important entry points, and Goertek has accumulated deep expertise in these areas, making it a key supplier for “auditory” and “visual” interactions.
Longqi Technology: Leading ODM (Original Design Manufacturer) for smartphones. It provides design and manufacturing for brands like Xiaomi and Samsung. Under the trend of AI smartphones, Longqi can help brands quickly implement AI features in mid-range models, making it an important force in promoting the popularization of AI smartphones.
ZTE Corporation: A giant in communication equipment and terminal brands. In the AI era, its advantages lie in its deep accumulation of communication technology (5G/6G), which is crucial for edge AI devices that require real-time collaboration with the cloud. Its own brand of smartphones and terminal devices will also benefit from the AI wave.
BYD Electronics: A giant in structural components and complete machine OEM. It has strong advantages in structural components such as metal, glass, and plastic, and also provides modules and complete machines for smartphones and automobiles. The new forms of AI hardware will bring about innovations and incremental demand for structural components, making BYD Electronics a significant beneficiary.
Second Link: Core Chips and Hardware Brain (Technical Barriers and Value Core)
This is the “brain” of edge AI, determining the AI computing power, energy efficiency, and interaction capabilities of the device, with the highest technical barriers.
Amlogic: Leading company in multimedia intelligent SoC chips. Its products are widely used in smart set-top boxes, smart TVs, and AI audio-video devices. Its chips possess powerful audio and video processing capabilities, making them the preferred “main chip” for edge AI devices in home and commercial scenarios (such as AI boxes and smart display terminals).
Actions Technology: Leading company in smart audio SoC chips. It mainly supplies smart headphones, smart speakers, etc. Its chips support active noise cancellation, voice recognition, and AI voice assistants, making it the core of “auditory” interaction. Edge AI will greatly enhance the independent processing capabilities of smart headphones, making Actions a direct beneficiary.
Espressif Systems: Leading company in IoT Wi-Fi/Bluetooth MCU communication chips. It holds an absolute dominant position in the AIoT (Artificial Intelligence of Things) field. Its chips serve as the “connection center” for various smart home and wearable devices, and edge AI will drive IoT devices from “connectivity” to “intelligence”, with both demand and value for Espressif expected to increase.
Rockchip & Tsinghua Unigroup: Both are important suppliers of wireless connection chips for IoT. Rockchip has deep expertise in Bluetooth audio, while Tsinghua Unigroup specializes in low-power Bluetooth and multi-mode wireless connections, making them important peers of Espressif in the AIoT track, also benefiting from the explosion of AI-driven smart hardware.
Zhili Technology and JEPTEK: Semiconductor and consumer electronics testing equipment manufacturers. AI chips and hardware processes are more complex, requiring higher precision and efficiency in testing. These two companies provide high-end testing equipment such as optical and visual systems, acting as “water sellers” upstream in the industrial chain, with demand expected to grow throughout the hardware innovation cycle.
Third Link: Key Components and Precision Functional Parts (Innovation Implementation and Incremental Demand)
The new forms and functions of AI hardware will generate incremental and upgrade demand for specific components.
Lens Technology: Leading supplier of glass, sapphire, ceramic, and other exterior structural components. AI glasses, AR/VR devices, etc., have high requirements for the innovation of front covers, lenses, and body strength, making Lens a core supplier.
Lingyi Technology: Supplier of functional parts, structural components, and modular platforms. It provides one-stop services from precision parts (such as magnets, screws) to modules (such as charging modules). Its modular capabilities are particularly valuable in AI hardware with tighter internal spaces.
Pengding Holdings: Global leader in PCBs (Printed Circuit Boards). No electronic device can do without PCBs. The enhancement of AI hardware computing power and higher integration requires more layers of HDI (High-Density Interconnect) and SLP (Substrate-Like PCB), with Pengding being a technology leader.
Crystal Optoelectronics and Lante Optics: Experts in optical components. Their products include optical lenses, prisms, diffractive optical elements (DOE), AR waveguide plates, etc. They are core to AR/VR and light field display technologies, playing a key role in AI visual interactions.
Hengmingda and Fulivang: Suppliers of precision functional devices. They provide precision metal parts, conductive insulating materials, etc., for consumer electronics. Innovations in AI hardware will bring new customization demands for these “small parts”.
Boshuo Technology: Supplier of functional devices. Its main products are auxiliary materials and consumables used in the production process of electronic products, such as adhesives, insulating materials, shielding materials, etc., which are essential in the manufacturing process.
Fourth Link: Energy Management and Heat Dissipation (Ensuring Endurance and Performance)
Stronger computing power means higher power consumption, posing new requirements for battery technology and heat dissipation.
Zhuhai Guanyu and Zijiang Electronics: Leading companies in consumer lithium batteries. Zhuhai Guanyu is globally leading in mobile phone and laptop batteries; Zijiang Electronics specializes in small button batteries for TWS headphones, etc. Edge AI devices have higher requirements for battery endurance, energy density, and safety, and the technological upgrades of battery manufacturers will bring value enhancement.
Industrial Fulian: A giant in heat dissipation solutions. Although known for its server business, it has deep expertise in thermal management materials and technologies. High-performance edge AI devices (such as AI smartphones and AR glasses) require more efficient heat dissipation solutions, which Industrial Fulian can provide with relevant technologies and products.