The global artificial intelligence (AI) competition is rapidly moving beyond large language model (LLM) development, as leading technology companies race to embed AI into hardware, devices, and applications across consumer and enterprise markets. Samsung, OpenAI, and Meta are all pursuing strategies that go beyond cloud-based AI, signaling a shift toward vertical integration and ecosystem dominance.

Several Chinese smartphone brands are moving closer to Doubao, ByteDance's LLM platform, accelerating partnerships tied to AI smartphones. The shift reflects mounting pressure from falling mobile phone shipments and a premium market long locked up by Apple and Huawei, where smaller brands struggle to gain traction. AI applications and services have thus emerged as one of the few remaining levers for differentiation.

These are the most-read DIGITIMES Asia stories in the week of Dec 29 - Jan 4.

Asus announced on January 2, 2026, that it will not release any new smartphones this year, effectively suspending a mobile business the Taiwanese hardware giant has sustained for more than 20 years without ever achieving profitability.

Asustek Computer has confirmed it will not launch any new smartphones in 2026, effectively scaling back its mobile device business. At the same time, the company emphasized that after-sales support, maintenance, software updates, and warranty services will continue as normal. The move comes amid intensifying global competition and supply chain challenges, with the company redirecting efforts toward emerging products like drones and smart glasses.

Smartphone distributors in Taiwan have recently said they are no longer able to obtain Asus handsets through local agents and claimed they had received information indicating that Asus's smartphone unit would operate only through December 31, 2025, after which the company would stop launching new smartphone products.

Twoway Group announced on December 31, 2025, that its chairperson, Bi-shuang Chen, along with other business personnel, has been indicted by the Taoyuan District Prosecutors' Office in Taiwan on charges of attempted breach of trust under the Criminal Code. The case is currently awaiting court review, and the company emphasized that its financial status and business operations remain unaffected.

Demand for high-bandwidth memory (HBM) is crowding out production capacity for consumer memory. Despite capacity expansions by major memory makers, including Micron, Samsung, and SK Hynix, the supply of HBM for AI servers remains tight, and the demand from large chipmakers is difficult to satisfy immediately. IC distributors report that lead times from memory manufacturers have now extended to 52 weeks. With priority allocation given to large clients, almost no stock is available. Both distributors and customers must now pay upfront and wait in line for delivery.

Samsung Electronics' 2026 spring flagship smartphones, the Galaxy S26/S26 Plus, are rumored to feature specifications similar to those of the previous generation. Analysts have revealed that this is related to the management style of TM Roh, head of Samsung's Mobile eXperience (MX) business, who has emphasized cost reduction. However, this strategy has not been received well by consumers.

Taiwan's smartphone market shipped around 5 million units in 2025, remaining stable despite factors like high market penetration, longer replacement cycles, and inflation, according to Senao International. Leading brands Apple, Samsung, Oppo, and Vivo each reported operational gains amid evolving consumer preferences.

Under ongoing geopolitical risks and rising tariff barriers, Foxconn Technology Group's smartphone assembler FIH Mobile plans to shift part of its new product introduction (NPI) operations from China to Vietnam starting in 2026, sources say. This move marks a significant step as the industry adapts to heightened supply chain resilience demands amid US-China tech tensions.

2025 proved turbulent for downstream applications and end-user devices. Tariffs and geopolitical tensions dominated the first half, while AI gained momentum later in the year. Global market unpredictability pushed many brands—particularly in China, the epicenter of geopolitical tensions—toward domestic markets and self-sufficiency.

Samsung Electronics has expanded an internal investigation into alleged employee misconduct at its Taiwan subsidiary, a move the company characterizes as an isolated matter despite its timing amid a global tightening of memory chip supplies. The probe, which stems from a routine internal audit, focuses on suspected kickbacks involving a limited number of staff and predates the current first quarter of the 2025 fiscal year, according to reporting from DIGITIMES and industry sources in South Korea.

Samsung Electronics recently launched its tri-fold smartphone, the Galaxy Z TriFold. Despite its high price point, the device continues to sell strongly worldwide. However, Samsung reportedly remains cautious about increasing production due to the device's extremely high costs, which leave the company with little to no profit margin.

Tariffs, inflation, and geopolitical risk continue to cloud the global economy, while the smartphone industry faces fresh pressure from higher upstream material costs and component shortages. As 2026 approaches, several structural issues are set to define the market's direction.

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.

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.

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.

Despite approaching the end of the year and the promotional peak season coming to an end, overall utilization rates in the smartphone panel market have remained relatively high. Additionally, differences in market conditions and structures among panel technologies have led to mixed price movements.

Apple has confirmed it will release a new generation of Siri in 2026, marking a major software update and a renewed effort to compete in the artificial intelligence (AI) sector. The move follows a cautious approach by Apple compared to faster developments by competitors.