KGI Securities (Thailand) has issued a cautious stance on Hana Microelectronics (SET: HANA) due to the anticipated impact of rising memory costs on the demand for smartphones and PCs—a core market for the company.
Drawing from KGI Taiwan’s recent sector update, the brokerage highlights that strong server demand is driving a significant memory shortage, leading to expected memory cost increases for PCs and smartphones of at least 50-60% year-on-year in 2026.
Since DRAM and NAND flash contribute up to 20% of a PC’s bill of materials and up to 15% for smartphones, this substantial hike is expected to be passed along through higher prices, cuts in promotional offers, or downgraded product specifications, potentially curbing demand.
KGI Taiwan forecasts global PC shipments to drop by 2% in 2026, with a 5% decline in consumer PC sales and flat growth in the commercial segment. Similarly, global smartphone shipments are set to contract by 2%. The research notes that low-end smartphone models will feel the brunt of the cost pressures, while high-end models, particularly Apple’s iPhone, are expected to be shielded somewhat, benefiting from premium sales mixes and stable supply contracts.
For HANA, sales from smartphones and PCs make up about 30-35% of total revenue, so weakness in these sectors could negatively impact earnings, though the effect may be delayed until after the first quarter of 2026 due to ongoing inventory restocking.
Looking at the near-term, KGI expects some improvement in 4Q25 earnings from a low comparison base, resulting in year-on-year and quarter-on-quarter growth, but overall recovery will remain limited.
KGI recommends investors take a wait-and-see approach and reiterates a ‘Neutral’ rating on HANA, with an end-2026 target price of THB 17.00 per share, emphasizing a lack of earnings visibility for the industry and lingering uncertainty regarding HANA’s PMS business following its production transfer to Chinese manufacturers.
