Inari to see solid growth through FY24

Flattish RF segment unlikely to blur big picture

“The group plans to set up another 10 SOM lines at the P34 plant in the next 18 months to ride on the robust demand.” Publicinvest Research

PETALING JAYA: Inari Amertron Bhd is anticipating sales growth in financial year 2023 (FY23), despite flattish growth in radio frequency (RF) components.

Publicinvest Research said despite seeing flattish growth in RF components, it expects sales growth in FY23 to come from fibre transceiver modules, high power light-emitting diode (LED) packages for optical communication, automotive and industrial segments, and system-on-modules (SOM).

Inari Amertron is an outsourced semiconductor assembly and testing provider to wellknown multinational and local electronics product manufacturers in the region.

After a recent virtual briefing with the company’s management, Publicinvest Research said the smartphone segment, which delivered 10% sales growth in FY22, is expected to see stagnant growth for FY23 due to the slowdown in smartphone demand.

Nevertheless, the group expects to see a pick-up in demand in FY24, led by growth in value content and design wins such as radio frequency double-sided moulding systems in-package (SIP) for the next new phone cycle.

More complicated products are lined up for FY24. The company’s RF segment is expected to exceed Rm1bil in sales over the next two years, according to the company.

Meanwhile, Publicinvest Research said the optical communications segment is expected to see strong growth in FY23 on the back of mass commercialisation of the new 100G Fibre Transceiver Module at its P21 plant by the end of the year. It has interviewed some multinational companies for Plant 21.

There are five new customers expected for the new test lab operation setup.

The cloud-light operation in the Philippines is almost ready to offer turnkey services.

The new high-power LED project is on track for high volume production of 500,000 tonnes by the year’s end.

In the auto segment, Publicinvest Research said two SOM lines have been added at the P34 plant and one SOM line at P55, despite continuously facing material constraints.

The new production lines are mainly to cater to Broadcom, networking systems and industrial and automotive customers.

“The group plans to set up another 10 SOM lines at the P34 plant in the next 18 months to ride on the robust demand in automotive and industrial segments.

“In-short, FY23 is expected to see better sales performance with solid margins,” Publicinvest Research added.

As for capital expenditure (capex), FY22 totaled Rm129mil, compared to FY21’S Rm99mil. The allocated capex for FY23 is around Rm100mil to Rm150mil.

Meanwhile, the new joint venture with China Fortune Tech Capital is on track, with ground work starting to take place on an 11.5acre industrial site in Yiwu, Zhejiang, China.

The facilities are expected to see commercial production by the second half of 2023.