In a significant move reflecting the global shift in supply chains Murata Manufacturing Co., a leading Japanese manufacturer of Multilayer Ceramic Capacitors (MLCCs) is considering expanding its production capacity to India. The Kyoto-based company which supplies critical components for Apple iPhones, Samsung smartphones, Nvidia servers, and Sony gaming consoles is exploring opportunities to align with India’s growing demand for electronics and its emerging role as a global manufacturing hub.
Why India?
Murata’s interest in India is driven by several factors:
- Growing Demand: India’s booming electronics market fueled by rising consumer spending and a young tech-savvy population, presents a lucrative opportunity for Murata.
- Customer Shifts: Major clients like Apple are diversifying their production bases beyond China with India emerging as a key destination. Apple has already begun trial production of AirPods in India and many Chinese smartphone manufacturers are also setting up factories in the country.
- Government Support: The Indian government, under Prime Minister Narendra Modi has introduced policies and incentives to attract foreign investment and boost domestic manufacturing.
Murata’s Strategic Approach
Murata is taking a cautious yet proactive approach to its India expansion. The company has leased a facility at the OneHub Chennai Industrial Park in Tamil Nadu, where it plans to package and ship ceramic capacitors starting in April 2026. This five-year lease, valued at ¥1 billion ($6.6 million), will serve as a testing ground to assess long-term demand and operational feasibility in India.
Norio Nakajima, President of Murata Manufacturing, explained, “It’s too early for us to build an integrated production facility in India, as the infrastructure for inputs like power hasn’t reached the required level. However, we wanted to move early to build some capacity as our customers shift production. There’s growing consumer demand for electronics in the country, and we should be ready to respond quickly when India introduces new incentives to encourage domestic manufacturing.”
Global Supply Chain Realignment
Murata’s potential expansion into India is part of a broader global realignment of supply chains. While the company currently produces 60% of its MLCCs in Japan, this proportion is expected to drop to 50% in the coming years as production shifts overseas.
However, Nakajima clarified that Murata has no immediate plans to build manufacturing facilities in the United States. “Our capacitors are built into products assembled mainly in Asia before shipment to the US. While we’ve discussed the impact of US tariffs, our primary concern is the indirect damage they might cause, such as higher consumer goods prices, which could ultimately hurt orders for capacitors,” he said.
Future Growth Drivers
Murata anticipates steady growth in global smartphone shipments with a projected 3% annual increase to 1.18 billion units in fiscal 2024. However, the company sees more rapid growth in demand for AI-powered servers which require advanced MLCCs to function efficiently.
The company’s stock price has risen by 15% since its quarterly earnings report in early February, reflecting investor confidence in its ability to capitalize on emerging technologies like AI and electric vehicles (EVs).
What Bloomberg Intelligence Says
According to Bloomberg Intelligence, Murata’s MLCCs and inductors are poised for significant growth driven by their critical role in advanced chips for AI and EVs. The company’s radio-frequency modules including its innovative MetroCirc technology are also expected to boost sales and profits as the global wireless network transitions to 6G systems in the next 5-6 years.
Conclusion
Murata Manufacturing’s exploration of India as a production base underscores the country’s growing importance in the global electronics supply chain. By aligning with India’s rising demand for electronics and leveraging government incentives Murata is positioning itself to stay ahead in a rapidly evolving industry.
As the world shifts toward AI, EVs, and advanced wireless technologies, Murata’s strategic investments and adaptability will play a crucial role in shaping the future of electronics manufacturing.
FAQs
1. What are Multilayer Ceramic Capacitors (MLCCs)?
MLCCs are essential components used in electronic devices to regulate power delivery. They are found in smartphones, servers, gaming consoles, and other electronics.
2. Why is Murata considering India for expansion?
India’s growing electronics market, customer demand, and government incentives make it an attractive destination for Murata’s production expansion.
3. What is Murata’s current production capacity in Japan?
Murata currently produces 60% of its MLCCs in Japan, but this is expected to decrease to 50% as production shifts overseas.
4. What are Murata’s growth drivers?
Murata expects growth from AI-powered servers, EVs, and the transition to 6G wireless networks.
5. When will Murata start operations in India?
Murata plans to begin packaging and shipping MLCCs from its leased facility in Chennai by April 2026
