FN
Fabrinet
Is FN Halal?
Provider of precision optical and electro-mechanical manufacturing services for technology companies — a permissible manufacturing business with a debt-free, net-cash balance sheet.
What You Should Know
Fabrinet is a publicly-traded company that provides precision optical, electro-mechanical, and electronic manufacturing services to original-equipment manufacturers of optical communication components, lasers, sensors, and other advanced products, handling complex assembly, test, and supply-chain work on behalf of its customers. Providing contract manufacturing and assembly services is a general-purpose industrial-technology activity that is permissible at the activity level under standard Sharia methodology; Fabrinet earns manufacturing-service revenue rather than interest. Fabrinet maintains a debt-free balance sheet with a substantial net-cash position, so it comfortably passes the debt-to-market-cap screen; the primary financial-screen consideration is the interest income generated by its cash and investments, a small portion of which should be purified. Subject to verifying ratios at the time of investment, most major Sharia advisory boards classify Fabrinet as permissible with purification of small interest-income components.
⚠️ Concerns
- •Fabrinet holds a substantial cash and investments balance that generates interest income — verify the interest-income-to-revenue ratio against the 5% threshold and purify the corresponding portion of any returns
- •Debt-to-market-cap ratio should be confirmed against the 33% Sharia threshold at the time of investment, though Fabrinet typically operates debt-free with a net-cash position
- •Fabrinet derives a large share of revenue from a small number of major optical-component customers — this customer-concentration risk is a business and valuation consideration rather than a Sharia screen concern
- •As a contract manufacturer, Fabrinet carries meaningful receivables and inventory — verify the receivables-to-assets ratio against the preferred board's threshold at the time of investment
Similar Stocks
Want to screen more assets?
Use our interactive Halal Checker to screen any stock, ETF, or crypto instantly.
Go to Halal Checker →