IT Hardware: More Takeaways From Taiwan – COMPUTEX Edition

Research evidence excerpt

IT Hardware: More Takeaways From Taiwan – COMPUTEX Edition

IdeaM(3) consumer applications (e.g. PCs and smartphones) are the most challenged

end markets, with CPU shortages, rising channel inventory, and weakening

consumer demand raising the risk of unit pressure into C2H26; (4) HDD supply

tightness continues to intensify, particularly in China, with hyperscaler deployment

rates at peak levels and no credible new supply entrants, reinforcing a favorable

pricing backdrop for incumbents; and (5) across the ecosystem, scale, sourcing

leverage, and exposure to enterprise and hyperscaler demand increasingly

differentiate winners from losers, leaving large, diversified, enterprise skewed

OEMs better positioned than smaller or consumer heavy peers as semiconductor

inflation and supply constraints persist.

Memory Supply/Demand for Hardware OEM

• Server OEMs expect another 25-30% Q/Q increase in DRAM pricing in

C3Q26 alongside a further 20-40% Q/Q increase in NAND prices.

• In April-May, several Chinese smartphone and PC OEMs cut C2H26 memory

forecasts as end demand weakened, while Apple raised its forecasts to

memory suppliers, likely to build "lower cost" inventory for the future amidst

strong recent iPhone sell-in to replenish channel inventory.

• PC and server OEMs are signing NAND and DRAM LTAs through 2028 with

different price ranges by SKU, which we view as an attempt to manage

memory cost volatility for consumer applications; however, we believe

memory suppliers may continue to re-negotiate if the cycle materially

strengthens or weakens, so uncertainty on exact pricing remains.

• Several PC OEMs are increasingly using Chinese memory suppliers as

alternatives, and while there has been no meaningful de-specing at the