Murata Manufacturing Co., a key supplier of iPhone components, is considering relocating some of its production capacity to India, as part of a broader shift in global supply chains toward the country. The Kyoto-based maker of multilayer ceramic capacitors has seen rising demand in India and is currently conducting simulations to assess the potential for increasing 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% of its MLCCs in Japan, but that proportion will likely fall closer to 50% 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 expanding its production outside of China, with its AirPods wireless earphones now being produced on a trial basis in India. Additionally, several Chinese manufacturers of mid-range smartphones are planning to establish more factories in India, attracted by the country's large workforce and growing 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% 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% since the company reported quarterly earnings in early February,