Plant P34 Gradually Being Filled

Plant P34, Inari’s latest plant expansion, with a capacity of 680k sf is gradually being switched on. As part of its expansion plans for its RF division, a portion of the RF assembly process comprising surface mount technology (SMT) and moulded chip on board (MCOB) is being set up. Of the targeted 8 assembly lines, 2 have already be installed. Separately, the manufacturing JV Inari entered into (Inari owns a 30% stake) with Taiwanese listed PCL Technologies Inc. in September 2019 for the assembly and testing of fibre optic modules is also due to commence production soon. Both are estimated to take up to c.18% of P34’s total production floor space by end-FY20. Meanwhile, Inari continues to explore new business opportunities, which have incidentally grown post the trade tensions, to fill its capacity but remains selective, preferring to invest with the right partners with the right technology.

Sensor Business a Mixed Bag

The sensor division has been volatile in the past. The IRIS sensor has reached the end of its life, while the much-awaited mini-LED product is running at c.3m units per month, a far cry from earlier production estimates. Meanwhile, revenue for its other VCSEL-related product, a health sensor for its ultimate Korean customer, remains soft but there is potential for a 3D facial recognition sensor for the same customer. The latter has been designed in to the customer’s flagship model and production is ramping up.

Source: Affin Hwang Research - 3 Jan 2020