Key Apple Supplier From Japan Sees Demand Correction, Fears Migrating Production To China Over Security Concerns

·1 min read
  • Murata Manufacturing Inc (OTC: MRAAF) (OTC: MRAAY) expects Apple Inc (NASDAQ: AAPL) to curtail iPhone 14 production further in the coming months because of weak demand.

  • "Judging by handset availability in stores, I see a downward revision happening," Murata President Norio Nakajima said in a Bloomberg interview. "I hope that it won't be too deep."

  • Nakajima's comments reflect slowing consumer spending due to rising interest rates, elevated inflation, and sputtering economic growth.

  • Also Read: Taiwan Semiconductor Wins Apple, Nvidia As First Customers Of Arizona Plant: Report

  • Apple has pruned iPhone output as demand weakened and may slash production further.

  • Supply-side problems did not bother Murata as it could recoup production in January and February, said Nakajima. Demand-side weakness is a concern, he said.

  • Nakajima said Chinese handset makers' incoming models lacked enticing new features.

  • He expected the phone market to start recovering "at a gradual pace" in the fiscal year beginning in April.

  • Nakajima ran a long-term project to build a production chain for Murata that operated entirely in China, using local parts.

  • Murata makes 65% of its products in Japan.

  • Nakajima expressed bullishness over China's prowess in semiconductor technology. However, he was wary about migrating production to China, including high-frequency devices and communication modules, due to his concerns over confidential information security.

  • Price Action: AAPL shares traded lower by 1.51% at $140.75 premarket on the last check Friday

See more from Benzinga

Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.