Inari Amertron Business Analysis

Today we will share our analysis on Inari Amertron Berhad, once the giant of Malaysian technology company. Now the state of Inari is more like a falling giant struggling to stand up, dropping 50% with RM7 billion of market value erased from its peak. 

But before we start our analysis, let us repeat our investing philosophy again:

There are 2 parts to this philosophy: -

1. Predicting the future: To be successful in investing, you should only invest in assets/business that you can understand

2. Future is unpredictable: No matter how great a business is, it’s not worth paying more than its worth

Big picture

Malaysia is an important piece in the global semiconductor value chain, with 7% of the semiconductor trade flows and 13% of back-end operations globally. We didn’t reach here overnight, it all started in the 1970s when Intel invested $1.6 million to open up its first offshore assembly plant in Penang, hiring 100 Malaysians.

This move defined Malaysia’s position in the global semiconductor value chain – outsourced semiconductor assembly and test (OSAT). But what is OSAT?

Semiconductor value chain is very long and complex, hence there is no one company that can do it all. For simple understanding, the value chain for semiconductor need to go through these few stage:

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