Murata Manufacturing, a leading Japanese supplier of iPhone components, has initiated test production in India, aiming to meet the increasing demand for electronics in the region. With a $6.6 million investment, Murata Manufacturing is exploring India as a potential manufacturing hub for multilayer ceramic capacitors (MLCCs), crucial for smartphones and other consumer electronics.
The move aligns with Murata's strategy to diversify its supply chain while capitalizing on India's growing electronics market and government incentives for domestic manufacturing.
The expected increase in customer demand for its products led Murata to make this strategic expansion decision for India. The company wants to develop local business expertise while creating capabilities needed for potential manufacturing operations throughout the region. With a ¥1 billion ($6.6 million) investment Murata aims to advance into the market for five years utilizing a five-year lease to evaluate prospects for future development. The complete manufacturing operation will start during FY2026.
The substantial growth in Indian consumer numbers serves as a crucial motivation for Murata to expand its operations. The expanding electronic market, together with government funding for domestic manufacturing, allows Murata to expand its presence throughout Asia. The company obtained space at the OneHub Chennai Industrial Park in Tamil Nadu to start capacitor packaging operations in April 2026.
Murata's decision to explore India follows similar moves by other tech companies, including Apple, which has expanded production beyond China to diversify its supply chain. Murata's investment in India will allow the company to align with customer production shifts and take advantage of the growing demand for electronics in the region.
Murata said establishing an integrated production facility in India should not occur now. The insufficient power supply and other infrastructure challenges prevent Murata from building its full-scale production complex. The company plans first to test long-term market demand while assessing future manufacturing incentives before deciding on any additional investments.
Murata's capacitors serve essential functions in electronic devices, including smartphones and gaming systems. The company leads in supplying capacitors to Apple, Samsung and Sony, so it has a strong foundation for growing its market reach globally. The Japanese operations of Murata produce approximately 60% of its MLCCs, but the company intends to reduce this percentage through manufacturing expansion outside of Japan.
Global smartphone shipments are projected to grow by 3% annually, driven by increasing demand for low- and mid-range devices in emerging markets. In addition to smartphones, Murata anticipates strong growth in AI server demand, which has already contributed to a 15% rise in the company's stock price. As a result, Murata is well-positioned to meet the rising demand for its products in Asia and beyond.