PETALING JAYA: Semiconductor company Inari Amertron Bhd
’s proposed acquisition of Netherlands-based Lumileds International offers a more balanced portfolio between its radio frequency (RF) and non-RF businesses, but the near-term earnings impact is expected to be minimal, analysts say.
MBSB Research believes the acquisition could be timely, based on the latest global forecast for the optoelectronics business.
Lumileds International develops automotive, display, illumination, mobile, and extended reality illumination light sources and solutions.
The segment should grow by approximately 3% next year following a contraction of 1.1% year-on-year anticipated for this year.
CIMB Research said the deal offers strategic diversification into silicon carbide (SiC) and gallium nitride (GaN) back-end products, even though execution and regulatory risks remain.
Inari had on Aug 1 proposed a joint acquisition of loss-making Lumileds with China’s Sanan Optoelectronics.
CIMB Research viewied Lumileds as a potential proxy for the China Plus One strategy, enabling Inari to serve global customers looking to diversify their supply chains outside of China.
While tapping into Sanan’s expertise in semiconductor compounds such as SiC and GaN, which are critical for next generation automotive, electric vehicles, and power applications, Lumileds could target markets otherwise inaccessible to Sanan directly.
This dual-market strategy allows Sanan to focus on China while Lumileds captures demand in geopolitically sensitive markets, said CIMB Research.
Inari, in turn, stands to benefit from exposure to advanced assembly and test processes in SiC and GaN, supporting its diversification beyond the smartphone segment and into automotive and industrial applications, the research house added.
CIMB Research maintained its “buy” call with an unchanged target price of RM2.20 a share, while MBSB Research retained its “neutral” rating with a target price of RM2.13 a share.
MBSB Research said the RF business segment made up 66% of Inari’s revenue for the first nine months of its financial year ended June, 2025, followed by the optoelectronic business segment at 28%, and the generic segment 6%.
The research house anticipates that should Inari take up half of the assembly and testing portion of Lumileds’ business, the revenue contribution for the optoelectronics segment could balloon to about 44% of total revenue while the RF business segment would go down to slightly over 51%.
