Inari’s RF space poised for massive upcycle

KUCHING: Inari Amertron Bhd’s (Inari) radio frequency (RF) space is poised for a massive upcycle with the adoption of 5G in the upcoming US flagship smartphone.

According to the research arm of Kenanga Investment Bank Bhd, this is because Inari’s key customer has secured a three-year US$15 billion deal to continue supplying wireless components to the US smartphone maker.

“RF filters per handset is expected to jump circa 75 per cent so as to maintain a healthy signal to noise ratio (SNR), especially when incorporating higher frequency bands,” Kenanga Research said.

“In anticipation of higher loading volume, Inari is adding eight more system in package (SiP) assembly lines for RF in its P34 plant (Batu Kawan), in addition to the existing eight lines in its P13 plant ( Bayan Lepas).

Kenanga Research highlighted that US smartphone replacement cycle is long due with the top three active US smartphones in circulation still comprising four to five year old models such as the seventh gen (2016), sixth gen (2015) and eighth gen (2017).

“These models are likely experiencing hardware bottlenecks and end-of-life support for new operating systems (OS) which would result in less-than-optimal user interface (UI) experience.

“Hence, it is very likely that the 2020 model will be the go-to choice for a future-proof upgrade among consumers.”

The research arm noted that the new 14th gen OS will bring about long awaited features, such as widgets, picture-inpicture and app library, which is expected to be very well received and could potentially win over market share from the Android user base.

Kenanga Research also highlighted that with 5G demanding more frequency bands on the consumer front, back-end data centres are seeing the need for faster wired connection among servers in order to deliver content to consumers at 5G speeds.

“Inari aims to manufacture optical transceivers that are used in data centres to encode and decode electric signals into light pulse for data transmission over a distance via optic fibre.

“The group will be focusing on optical transceivers capable of transfer speeds up to 400 Gbps, four-times the speed of current transceivers used in data centres.

“Contributions are expected to kick in financial year 2021 (FY21), in tandem with the market’s transition to 400 Gbps as global deliveries for 100Gbps to 200Gbps ports are expected to peak in 2020.”