KUALA LUMPUR (Dec 20): Inari Amertron Bhd, whose shares nosedived yesterday on news of US-based Broadcom Inc planning to sell off its wireless-chip unit, staged a mild recovery this morning.
The stock, still the most actively traded as of this morning, rose five sen or 3.11% to RM1.66. Yesterday, the back-end semiconductor packaging company tumbled 29 sen or 15.43% to close at RM1.61, its lowest in more than four months.
According to news reports, Broadcom Inc, an Apple supplier, is looking to sell one of its wireless-chip units, which would accelerate the company's shift away from its semiconductor maker roots. Some noted Apple itself could be a potential buyer.
"Broadcom is working with Credit Suisse Group AG to find a buyer for its radio-frequency (RF) unit, a segment of its wireless-chip business that makes filters used in cellphones to clarify signals, according to people familiar with the matter," The Wall Street Journal wrote.
Yesterday's selling pressure on Inari is probably due to Broadcom being a major customer of the Malaysian semiconductor group. The disposal could cause a disruption to the supply chain, analysts said.
UOB Kay Hian analyst Desmond Chong, who said there are both positives and negatives to the news, however, concluded that Inari's business remains intact.
"While it's everyone's best guess on the outcome of this news as there are too many variables at the moment, the sentiment doesn't favour Inari for now because of the uncertainty.
"But in the near term, its business remains intact — at least until end-FY21 — as Broadcom signed a two-year RF supply contract with Apple in June 2019," Chong told theedgemarkets.com yesterday.