DEEP RESEARCH · KMW

KMW: An AI-RAN Hardware Option Crossing the Valley of Death

A 2026 turnaround review balancing CCC+ credit risk and the 10th convertible bond against Rakuten 700MHz, Samsung AI-RAN, and Vietnam cost leverage

Published: 2026-01-11 · Telecom-equipment turnaround analysis · Original Naver Blog post

0. Bottom Line First

• As of April 2025, the eCredible CCC+ rating still signals meaningful financial risk.
• The 10th convertible bond was issued on July 8, 2024 for KRW 30 billion, matures on July 8, 2028, and becomes puttable on July 8, 2026.
• On September 8, 2025, the conversion price was raised from KRW 10,862 to KRW 13,067, reducing potential converted shares from about 1.83 million to 1.52 million.
• The turnaround catalysts are Rakuten's 700MHz Platinum Band, Samsung AI-RAN and 6G investment, and cost improvement from the Vietnam production base.

1. Current Position: The Telecom-Equipment Valley of Death

Official fact: The source introduces KMW Inc. (032500.KQ) as a leading Korean wireless-telecom equipment company and says the industry is crossing a “valley of death” as global 5G investment has been delayed versus early expectations.

Declining consolidated sales and persistent operating losses are obviously unfavorable. But the source focuses on the possibility of a hardware cycle returning from 2026. In AI-RAN and 6G, software alone cannot solve heat control, equipment light-weighting, and spectrum efficiency. Those requirements connect directly to KMW's filter and thermal-management solutions.

2. Financial Restructuring: The 10th CB and Subsidiary Consolidation

Interpretation: Distressed-company convertibles usually see downward refixing, which increases dilution. KMW instead saw an upward adjustment, which the source reads as a sign of recovering market confidence and a possible share-price floor. The July 2026 put option still remains, so orders and cash flow need to be visible before then.

3. Rakuten Momentum: 700MHz Platinum Band

Official fact: Rakuten Mobile launched commercial 700MHz “Platinum Band” service on June 27, 2024, and the source cites a plan to add 10,661 base stations over 10 years.

700MHz propagates well through buildings, underground areas, and mountainous terrain. It can address Rakuten Mobile's long-standing coverage-quality weakness, and if base-station deployment accelerates, demand for antennas and RF parts can follow.

• KMW has a record of supplying antenna systems attached to Nokia radio units during Rakuten's early 4G network buildout.
• The source says about 85,000 units were deployed during the initial 4G rollout, and KMW also worked with Flex on integrated radio-antenna units.
• In 2021, KMW demonstrated light-weighting capability through a 25kg-class Massive MIMO product.
• Rakuten's selection of Nokia for 700MHz radio equipment aligns with KMW's existing Nokia relationship.

The source also argues that when Rakuten Symphony exports Open RAN solutions to overseas carriers, KMW equipment could be adopted as part of the reference design. However, U.S.-led Open RAN projects that support new suppliers are a competitive-risk factor.

4. Samsung AI-RAN: Heat and Filters Matter Again

AI-RAN is not just a software upgrade; it changes base-station hardware. Dynamic beamforming raises antenna and filter precision requirements, while GPUs and NPUs inside base stations raise heat generation. The source views KMW's 2024-2025 thermal-mechanism and thermal-module patents as part of its technical moat.

Interpretation: In 6G and AI-RAN, connectivity and heat management are no longer separate. The source's note that Chairman Kim Duk-yong said thermal-management technology could even exceed RF communications revenue shows a path from telecom parts toward thermal-management solutions for AI infrastructure.

5. Vietnam Production Base: Hidden Earnings Leverage

6. Investor Checkpoints

• Rakuten order disclosures: watch Japan's 700MHz base-station deployment pace and antenna/RF supply contracts.
• Samsung AI-RAN roadmap: track network-division investment, AI-RAN hardware specifications, and 6G-preparation orders.
• CB conversion trend: determine whether the convertible is absorbed through equity conversion or becomes a cash outflow through the put option.
• Vietnam cost leverage: verify whether the 30% manufacturing-cost reduction assumption shows up in actual operating-margin improvement when revenue recovers.

Interpretation: KMW is a high-risk turnaround candidate. The CCC+ rating and CB put option are clear burdens, but if Rakuten, Samsung, and Vietnam leverage line up at the same time, 2026 could create room for rerating from telecom-equipment hardware maker to thermal-management and high-speed-connectivity solution provider for AI infrastructure.