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

• 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

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