China smartphone shipments rebounded month-on-month in March, but year-on-year pressure persisted

Overview

This report tracks March shipments of smartphones and 5G smartphones in China, new model launches, and changes in camera specifications. Smartphone shipments recovered sequentially in March after the Chinese New Year, but year-on-year growth remained negative; Goldman Sachs attributes the pressure to seasonal factors and rising memory costs suppressing end demand. At the same time, the report emphasizes that camera configurations are shifting from expansion in quantity to upgrades in higher-pixel specifications, with 20MPx+ cameras becoming the main contributor.

Core views

Core views include: first, China smartphone shipments in March were about 20 million units, up 24% month-on-month but down 6% year-on-year, with 1Q26 down 12% year-on-year; second, 5G smartphone shipments were likewise about 20 million units, with penetration reaching 93% and a slight 1% year-on-year increase; third, 2Q26 shipments are expected to decline 6% year-on-year, with demand still affected by costs and seasonality; fourth, camera counts per device continue to fall from the 2022 peak, but the share of high-pixel cameras is rising, supporting the camera specification upgrade thesis; fifth, Goldman Sachs continues to favor certain smartphone supply chain companies, including Hon Hai, AAC, Lingyi, Largan, SZS, Fositek, and TSMC.

Analysis framework

The report is based on MIIT monthly shipment and new model launch data, combined with camera-configuration samples from models launched year to date in 2026 by major Chinese smartphone brands, to assess industry demand, 5G penetration, new product cadence, and camera specification trends; it also supplements observations on foldables, imaging flagships, and AI feature upgrades through key new model cases such as Huawei Pura X Max and Oppo Find X9 Ultra.

Methodology notes

• Industry trackingMIIT monthly shipment data

  Smartphone and 5G smartphone shipments, number of new model launches, penetration rate

  The report uses MIIT data to compare month-on-month and year-on-year changes and tracks the penetration of 5G smartphones within total handset shipments.

• Product specification analysisSample analysis of camera pixel structure

  Count the number of cameras and pixel distribution by brand and model

  The report reviews 122 models and 353 cameras launched year to date in 2026 by Honor, Xiaomi, OPPO, Vivo, and Transsion, comparing camera counts per device and the shares of different pixel bands.

• Equity analysis frameworkGS Factor Profile

  Growth, Financial Returns, Multiple, and Integrated percentiles

  Goldman Sachs discloses that its equity factor framework uses growth, financial returns, valuation multiples, and integrated indicators to provide an investment context for individual stocks relative to the market and peers.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Hon Hai

  Preferred smartphone supply chain stock

  Strengths

  Rated Buy by Goldman Sachs and included on the Conviction List, benefiting from smartphone supply-chain demand and opportunities in premium model production.

  Weaknesses

  Industry shipment declines year-on-year and rising memory costs may suppress end demand.

  Comparison

  Included on the Buy list together with other preferred supply-chain stocks.

  Risks

  Smartphone demand below expectations, rising costs, and slower customer launch cadence.

• AAC

  Acoustics and smartphone components supplier

  Strengths

  Goldman Sachs rates it Buy with a target price of HK$39.60; it may benefit from specification upgrades and higher component value per smartphone.

  Weaknesses

  If shipments continue to decline, component orders may come under pressure.

  Comparison

  Like Lingyi, Largan, SZS, and Fositek, it is among Goldman Sachs' preferred smartphone supply-chain names.

  Risks

  Weak end demand, less-than-expected product specification upgrades, and price competition.

• Largan/Lorgan

  Beneficiary in the camera and optics supply chain

  Strengths

  The report highlights rising penetration of 20MPx+ cameras, supporting the thesis for high-pixel and imaging upgrades; Goldman Sachs rates it Buy.

  Weaknesses

  The number of cameras per device has fallen from the peak, weakening the benefit from volume expansion.

  Comparison

  Compared with ordinary component names, it is more sensitive to imaging flagships and high-pixel upgrades.

  Risks

  Slower camera specification upgrades, smartphone brands cutting premium configurations, and weakening demand.

• TSMC

  Chip manufacturing and premium smartphone supply-chain name

  Strengths

  Goldman Sachs rates it Buy and includes it on the Conviction List; premium models in the report reflect chip performance upgrade trends such as Kirin 9030 Pro.

  Weaknesses

  This report is not dedicated research on TSMC, and direct financial impacts are not elaborated.

  Comparison

  Along with Hon Hai, it is a Conviction List name within the recommendation list.

  Risks

  Declining end smartphone demand, semiconductor cycle volatility, and geopolitical and supply-chain risks.

• Huawei Pura X Max

  Case study of a new foldable model

  Strengths

  Equipped with a 5.4-inch outer display, 7.7-inch inner display, OLED panel, Xiaoyi AI, Kirin 9030 Pro, and HarmonyOS 6.1, with performance 30% higher than the previous generation.

  Weaknesses

  The report does not provide sales or pricing validation.

  Comparison

  As a new foldable model, it represents a different product upgrade direction versus the imaging flagship positioning of Oppo Find X9 Ultra.

  Risks

  Uncertainty in foldable demand, costs, supply chain, and consumers' willingness to upgrade.

• Oppo Find X9 Ultra

  Case study of an imaging flagship model

  Strengths

  Equipped with one 50MPx front camera and four rear cameras, including 200MPx, 200MPx and 50MPx periscope telephoto lenses, and a 50MPx ultra-wide camera, using Hasselblad Master Mode.

  Weaknesses

  Premium imaging configurations may raise costs and depend on sufficient high-end demand.

  Comparison

  Compared with Huawei Pura X Max, it places more emphasis on imaging flagship positioning and high-pixel camera upgrades.

  Risks

  Insufficient premium demand, rising costs, and competition from rival imaging flagships.

Key data

• China smartphone shipments in March20m unitsDown 6% year-on-year and up 24% month-on-month.
• 1Q26 China smartphone shipments-12% YoYDespite the sequential rebound in March, first-quarter shipments still declined year-on-year overall.
• 2Q26 shipment forecast-6% YoYGoldman Sachs expects the off-season and rising memory costs to continue suppressing demand.
• China 5G smartphone shipments in March20m unitsUp 23% month-on-month, up 1% year-on-year, with 93% penetration.
• New 5G smartphone models in March13 modelsDown 61% year-on-year; February had 15 models, up 67% year-on-year.
• New smartphone models in March15 modelsDown 69% year-on-year; February had 18 models, up 64% year-on-year.
• 2026 year-to-date sample122 models; 353 camerasCovers Honor, Xiaomi, OPPO, Vivo, and Transsion.
• Average number of cameras2.9 cameras per modelBelow 3.1 in 2025, 3.3 in 2024, and the peak of 3.8 in 2022.
• Share of low-pixel cameras26% at 2MPx/5MPx/8MPxBelow 31% in 2025 and 36% in 2024.
• 20MPx+ penetration62% in 2026 YTD57% in 2025, 52% in 2024, and 39% in 2023.

Impact & implications

At the industry level, the month-on-month rebound in March reflects more of a post-Chinese-New-Year recovery and an increase in model launches rather than a full demand reversal; year-on-year growth remained negative and 2Q26 is expected to continue declining, showing limited resilience in end demand. At the supply-chain level, fewer cameras per device may limit expansion in component content per handset, but the rising share of high-pixel cameras benefits suppliers tied to imaging upgrades. At the investment level, Goldman Sachs still favors companies with supply-chain positions, exposure to specification upgrades, or inclusion on the Conviction List despite demand pressure.

Risks

• Rising memory costs continue to suppress end demand.
• 2Q26 is in the seasonal off-season, and shipments may continue to decline year-on-year.
• The sequential improvement in March may mainly reflect post-Chinese-New-Year recovery and new model launches, and does not necessarily indicate a reversal in the demand trend.
• The number of new smartphone and new 5G models fell sharply year-on-year in March, possibly reflecting weak brand launch cadence.
• The number of cameras per device continues to decline, which may weaken the supply-chain boost from camera-count expansion.
• If the rise in 20MPx+ penetration falls short of expectations, the investment thesis related to imaging specification upgrades may come under pressure.

What to watch

• Whether 2Q26 China smartphone shipments match Goldman Sachs' expectation of a 6% year-on-year decline.
• The impact of changes in memory prices and overall handset costs on end prices and demand.
• Whether 5G smartphone penetration continues to rise or approaches saturation around 93%.
• Whether the number of new model launches by major brands recovers, especially in premium, foldable, and imaging flagship models.
• Whether 20MPx+ camera penetration continues to increase, and whether the share of lower-pixel 2MPx/5MPx/8MPx cameras continues to decline.
• Changes in camera configurations and product mix among brands such as Honor, Xiaomi, OPPO, Vivo, and Transsion.