Malaysia Semiconductors

Research evidence excerpt

Malaysia Semiconductors

Macquarie Equity Research Malaysia Semiconductors

FY26 earnings bottoming driven by RF

Inari Amertron (INRI MK):

• Maintain Neutral; least preferred. We maintain our below-consensus earnings forecasts• Maintain Neutral

for Inari (8%/7% below Bloomberg consensus for FY27E/28E), reflecting our more cautious

• TP +25% to RM2.00 assumptions for RF revenue growth and successful revenue diversification through new

clients. Following strong share-price momentum after the 3QFY26 results (+86% from the

RM1.21 low in March 2026, with the one-year forward PER expanding from 19x to 32x), we

believe the market has priced in optimism about an RF recovery and potential new revenue

streams.

• Smartphone house view and RF implications:

• Þ MQ analyst Cherry Ma expects memory shortages to increase smartphone ASPs by

US$25–70 and drive a sharp decline in global smartphone volumes of c.12% in 2026.

However, Apple should remain relatively resilient, with iPhone volumes declining by only

c.2% in FY26E before recovering by 3.3% in FY27E.

Þ Overall, we forecast a 9% YoY decline in FY26E revenue in US dollar terms, comprising

a 16% decline in RF and 4% growth in optoelectronics, at RM4.20/US$1. We expect

revenue to grow by 12% YoY in FY27E in US dollar terms, comprising 15% growth in RF

and 8% in optoelectronics, driven by Inari’s migration to higher-end RF products and an

increase in circuits won from its key client from one to four.

Þ RF accounts for 65% of revenue. Inari is qualifying for higher-end RF work, but

management expects the related revenue to materialise only in FY27E, alongside the

iPhone 18 launch. Inari expects RF content in the iPhone 18 to increase by 30–35%

YoY, which it aims to convert into additional RF revenue. We forecast 15% YoY RF