iPhone parts maker Murata eyes supply chain shifts toward India

According to Murata President Norio Nakajima, the Kyoto-based maker of multilayer ceramic capacitors sees growing demand in India and is running simulations for what it would take to dial up its pace of investment there.

By Takashi Mochizuki and Yuki Furukawa

IPhone components maker Murata Manufacturing Co. is weighing whether to move some of its production capacity to India, reflecting a global realignment of the supply chain toward the world’s most populous country.

The Kyoto-based maker of multilayer ceramic capacitors sees growing demand in India and is running simulations for what it would take to dial up its pace of investment there, according to Murata President Norio Nakajima.

“We’ve been making our newest capacitors mostly in Japan, but customers are asking us to manufacture more overseas due partly to business continuity planning purposes,” Nakajima said.

Murata’s components are found in almost all electronics, from Apple Inc. and Samsung Electronics Co. smartphones to Nvidia Corp. servers and Sony Group Corp. game consoles. The company has also helped put a NASA helicopter on Mars. Right now, it makes almost 60 per cent of its MLCCs in Japan, but that proportion will likely fall closer to 50 per cent in the years ahead, 63-year-old Nakajima said. Murata is the world’s leading supplier of capacitors, which regulate the delivery of power to electric components.

Apple has been diversifying production beyond China, most recently beginning production of its AirPods wireless earphones on a trial basis in India. Many Chinese manufacturers of mid-range smartphones are also expected to open more factories in India, drawn by the country’s abundant workforce and surging consumer spending.

Those moves by its customers, along with promises of support from Narendra Modi’s government, have spurred Murata to rent a plant in OneHub Chennai Industrial Park in India’s southernmost state of Tamil Nadu, where it plans to package and ship ceramic capacitors in the fiscal year starting April 2026. Murata is using the ¥1 billion ($6.6 million) five-year lease to test long-term demand in the country, before it commits to building a factory to span more production processes, Nakajima said.

“It’s too early for us to build an integrated production facility in India, because the infrastructure for inputs such as power hasn’t reached the level we need, but we wanted to move early to build some capacity there as our customers shift production,” Nakajima said. “There’s growing consumer demand for electronics in the country, and we also should be ready to respond quickly when India introduces new incentives to encourage domestic manufacturing.”

But while Murata is preparing capacity in India, it has no current plans to build manufacturing facilities in the US, Nakajima said. That’s because its capacitors are built into products assembled mainly in Asia before shipment to the US.

While US President Donald Trump’s broader view of reciprocal tariffs has prompted wide-ranging internal discussions at Murata, the main concern at the Japanese components maker is over the broader and indirect damage that tariffs might cause. A surge in prices in a wide range of consumer goods would ultimately hurt orders for capacitors, Nakajima said.

For now, Murata expects global smartphone shipments to continue their gradual growth of 3 per cen or lower every year, driven by sales of low- to mid-range handsets in emerging economies. More rapid growth will come from demand for servers that run artificial intelligence engines, Nakajima said. Expectations of robust demand from AI has boosted Murata’s stock price by around 15 per cent since the company reported quarterly earnings in early February,

Murata, seen as a leading indicator of gadget demand, expects global smartphone production in fiscal 2024 to reach 1.18 billion units, up 3% from a year earlier.

What Bloomberg Intelligence says

Sales of multilayer ceramic capacitors (MLCCs), which help advanced chips for AI and EVs function properly, might grow alongside the semiconductor market. MLCCs and inductors could substantially boost Murata’s long-term profit due to the company’s leading global market share. Murata’s radio-frequency modules, including MetroCirc, which features a multilayer resin substrate, may lift its sales and profit as the wireless network might shift toward 6G systems in 5-6 years.