Japanese Component Giant Adapts to Evolving Manufacturing Landscape
In response to the shifting dynamics of global supply chains, Murata Manufacturing Co., a leading supplier of multilayer ceramic capacitors (MLCCs), is exploring the expansion of its production footprint in India. The move aligns with a broader trend of diversification away from China, as global tech giants adjust their manufacturing strategies amid geopolitical tensions and supply chain vulnerabilities.
Murata’s capacitors are integral to various high-end consumer electronics, ranging from Apple iPhones and Samsung smartphones to Nvidia servers and Sony PlayStation consoles. Traditionally, the Kyoto-based company has manufactured a significant portion of its MLCCs in Japan, but rising demand and evolving customer expectations are prompting a rethink of its investment strategy.
India’s Growing Appeal in Electronics Manufacturing
With India emerging as a key player in global electronics production, Murata sees both opportunities and challenges in the country. Norio Nakajima, President of Murata, confirmed that the company has begun simulation exercises to assess the feasibility of increasing investment in India.
“We’ve been primarily producing our latest capacitors in Japan, but global customers are increasingly asking for overseas production, partly as part of their business continuity planning,” Nakajima said.
While Murata’s components currently support nearly 60% of global MLCC demand from Japan, that share is expected to decline to about 50% as the company ramps up overseas manufacturing.
Strategic Expansion: The Chennai Initiative
As part of its measured entry into India, Murata has leased a plant in OneHub Chennai Industrial Park in Tamil Nadu, where it plans to begin packaging and shipping ceramic capacitors by April 2026. The ¥1 billion ($6.6 million) five-year lease serves as a testing ground for long-term demand, allowing Murata to evaluate India’s readiness for a more integrated production facility.
Despite India’s potential, Nakajima remains cautious about making large-scale investments immediately.
“It’s premature to set up a fully integrated production plant in India at this stage. The power and infrastructure ecosystem still needs to reach the levels we require,” he explained.
However, India’s rapidly growing consumer electronics market and anticipated government incentives could accelerate Murata’s long-term commitment. The Indian government, led by Prime Minister Narendra Modi, has been actively encouraging domestic manufacturing through initiatives like “Make in India” and the Production-Linked Incentive (PLI) scheme for electronics.
Apple’s Influence on the Supply Chain Shift
Apple Inc., one of Murata’s largest clients, has been gradually relocating parts of its production outside China, recently starting trial production of AirPods in India. Several Chinese smartphone manufacturers are also expanding their operations in India, driven by the country’s skilled labor pool and rising domestic demand.
Murata’s strategic entry aligns with these industry-wide trends, ensuring it remains well-positioned as its major clients adjust their manufacturing geographies.
Why Not the U.S.?
While Murata is focusing on India, the company has no immediate plans to establish manufacturing facilities in the United States. The logistics of MLCC production, combined with the fact that most electronics assembly occurs in Asia, make India and other Asian nations more attractive investment destinations.
“Our capacitors are embedded in products that are mainly assembled in Asia before being shipped to the U.S.,” Nakajima said.
However, Murata remains cautious about the potential impact of U.S. trade policies. The Trump-era reciprocal tariffs and other trade restrictions have sparked discussions within Murata about how to mitigate risks associated with rising costs in consumer electronics.
Growth Projections and AI-Driven Demand
Murata expects global smartphone shipments to maintain a steady annual growth rate of around 3%, primarily fueled by low- to mid-range handset sales in emerging markets.
However, the biggest growth driver for Murata lies in AI-driven infrastructure. With increasing demand for AI-powered servers, companies like Nvidia, Microsoft, and Google require high-performance capacitors for data centers and cloud computing infrastructure.
Nakajima noted that optimism around AI advancements has contributed to Murata’s stock price rising by 15% since its latest quarterly earnings report in February 2025.
Final Thoughts: A Calculated Bet on India’s Future
Murata’s cautious but strategic approach to India reflects a broader shift in global electronics manufacturing. While China remains dominant, India’s rapid industrialization, policy support, and increasing demand make it an attractive alternative for supply chain diversification.
By taking incremental steps, Murata ensures it can adapt to India’s evolving market conditions, keeping its options open for a full-fledged manufacturing expansion in the future.
As India strengthens its position as a global electronics hub, Murata’s early investments may well position it as a leader in the next era of tech supply chains.