World’s Largest Capacitor Manufactoring Japanese Company MURATA Is Moving Out Of China

Japan aspires to eliminate China’s worldwide hegemony in the electronics business. Tokyo has welcomed semiconductor firms worldwide to establish a presence in Japan. Japan is trying to gain complete control of the world semiconductor supply, endangering China’s consumer electronics industry, highly reliant on semiconductor imports.

Japan is focusing on a new industry: capacitors. China is the world’s most significant maker of capacitors. However, this is about to change, as a Japanese capacitor manufacturing behemoth has opted to move production out of the country.

Capacitors are electrical charge storage devices. Capacitors are used to store and transfer energy, filter noise, and sense what is outside of a machine.

Electronic devices have semiconductors used for various purposes, including maintaining a constant voltage, providing “boost” power when the phone is about to run out of charge, and dissipating energy as a temporary power source for a brief time.

Japanese capacitor manufacturing company murata

Murata Manufacturing President Norio Nakajima (Photo by Atsushi Ooka)

Amid the present US-China trade war, Murata Manufacturing aims to reduce its reliance on China. Murata is the world’s largest capacitor manufacturer. It also provides components for the iPhone.The company sells filters to receive radio signals, amplifiers to augment transmit signals, and duplexers to manage incoming and outgoing calls.

Murata’s operations in China aided the Communists in becoming the market leader in capacitors. However, in October 2023, the Japanese capacitor behemoth plans to relocate to Thailand and construct a new plant there. According to Nikkei Asia, Murata President Norio Nakajima stated that the new plant in Thailand would be extended slowly. They plan to grow it to match the current factory in Wuxi, near Shanghai, where Murata manufactures multilayer consumer electronics ceramic capacitors.

Murata Manufacturing is responding to changing geopolitical equations and business conditions. Murata currently depends on China for more than half of its income. However, the capacitor manufacturer expects China’s percentage of its revenues to decline as the company looks to the Indo-Pacific for future growth.”There is a chance of events occurring beyond our control,” stated Norio Nakajima. The Murata President used the example of an unknown scenario, such as the United States putting a technology boycott on China. As a result, it makes sense for Murata to flee the Communist country before anything like this occurs. “We must diversify our supply chain,” he continued. Nakajima also mentioned that its significant customers, such as Apple, are exploring beyond China. This nullifies China’s fundamental advantage. A provider would prefer to be close to its consumers. And if clients begin to migrate away from a particular place, it is pointless to remain there.

With changing demographics, China is also losing the advantage of cheap labor and a large working class. “Today’s most populated country may be China, but in 2030, it will be India, and farther down the road, Africa,” Murata President remarked.”Will those economies align with China or the United States?” he continued. We’re unsure. In both cases, we should be able to respond.”

Capacitor company Murata President

Murata’s Nakajima believes there is a need to diversify away from China because of “a risk of events happening beyond our control,” such as Washington imposing a technology ban on it. (Photo by Atsushi Ooka)

The population of China is rapidly declining. According to some estimates, China’s population is expected to halve in the next 45 years. China’s population is rapidly aging due to a low birth rate of 1.3 and a longer life expectancy. China will have more than 35% of its population of people over the age of retirement by the year 2050. This will eliminate the driving force behind China’s manufacturing prowess: low-cost, plentiful labor. As a result, international firms and manufacturing behemoths like Murata see little use in sticking with Beijing and are transferring production elsewhere.



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