The company’s outlook has dimmed dramatically from a quarter ago, when it looked forward to a bounceback in Chinese demand after the end of Covid-19 lockdowns in major cities. Consumers in the world’s biggest smartphone market haven’t responded with a spending spree and Murata sees little prospect for a rally over the next year, president Norio Nakajima told Bloomberg News in an interview.
Kyoto-based Murata is a linchpin of the smartphone industry, providing electronic modules and components for Apple’s iPhones, Samsung Electronics’s Android devices and China’s leading device makers. Its shares have slumped more than 20% this year as key customers have weathered“Consumers might have been willing to buy new phones even with small upgrades if the economy were in a better shape,” Nakajima said, pointing to interest rate hikes by central banks around the world as a big factor.
“Chinese makers pushed hard to sell outside their home turf, but due to various issues including intellectual property infringements, consumers like those in India began to avoid Chinese phones,” he said. “The weak yen gives us a breather as it will make our earnings look good,” Nakajima said, without elaborating as the company is still calculating the latest figures. Previously, Murata guided its revenue would increase by 11 billion yen [$74 million] per year with every one yen weakening against the greenback. “But this is dangerous, because the impact from foreign exchange rates masks falling factory operating rates stemming from weakening demand.
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