Murata Manufacturing Co., the world’s largest manufacturer of ceramic capacitors for Apple Inc. and other smartphone brands, expects demand for fifth-generation wireless devices to exceed 500 million handsets in the coming fiscal year, building on a rush to replace Huawei Technologies Co. in the global consumer arena.
As Huawei’s mobile business shrinks under the weight of U.S. sanctions, Apple, Samsung Electronics Co. and Chinese rivals Xiaomi Corp., Oppo and Vivo are vying to secure components for their devices, hoping to fill a void.
In a recent interview, President Norio Nakajima said that Murata’s factories will not take a holiday break as they are working to catch up with mounting orders, adding “the situation is most serious with our cutting-edge smartphone capacitors”.
Once taken over by Huawei, these handset manufacturers are competing to catch our supply capacity, and I am not sure how much of it is enabled by their actual production forecast,” Nakajima said.” “I feel the move is overheated, so I expect their orders in February and March to drop.”
Murata is the global pioneer in the regulation of electrical flow in circuit boards using MLCC, or multilayer ceramic capacitors. Electronics ranging from smartphones to vehicles are connected to hundreds, even thousands of them.
“During the current fiscal year, the industry had 300 million units of 5G smartphones, and I expect that to increase to at least 500 million in the next fiscal year,” said the president of the Kyoto-based group. “In order to keep up with the growing demand, we will continue making capital expenditure.”
The Murata chief’s stance is deemed too conservative by observers. Hideki Yasuda of the Ace Research Institute does not expect demand from Apple and its ilk to decline at any point in this calendar year, fueled by a greater than expected user appetite for 5G phones.
Handsets expected to be published this year will also be compliant with a wider set of frequencies, increasing the need for electricity flow adjustment components produced by Murata.
Yasuda said the production hiccups of Murata are indicative of severe shortages across the supply chain of electronics, affecting the assembly of several products, including video game consoles. Both Sony Corp.’s PlayStation 5 and Xbox Series X from Microsoft Corp. remain limited in availability, almost two months after their initial release.
Murata’s Nakajima does not deny that the market for its MLCC will remain high throughout the year, even though he said he anticipated a brief respite after China’s Lunar New Year holiday. He said the MLCC sales of the company will increase by 10 percent in its next fiscal year beginning in April, primarily due to 5G phones.
