AAPL Apple Inc

TOKYO—Apple Inc. parts supplier Murata Manufacturing Co. said it would build a new, $100 million factory in Japan, defying widespread worries a slowdown in China's economy could damp smartphone sales.

"Even if the growth rate comes down to a certain level, we see demand for components increasing," company President Tsuneo Murata said in an interview Wednesday.

While better-known Japanese electronics giants have struggled in recent years, Murata has strengthened its market-leading position in several kinds of smartphone parts, including tiny capacitors and radio-frequency filters. As smartphones grow more sophisticated, they need more of these parts.

In China, adoption of high-speed mobile networks using technology known as long-term evolution, or LTE, has outpaced expectations this year, Mr. Murata said. That has increased demand for radio-frequency filters, which phones use to select the airwave frequency to use.

Murata, which specializes in what are called surface acoustic wave filters, plans to use the new plant—expected to open next year—to begin making a different type, bulk acoustic wave filters, Mr. Murata said. U.S. rivals such as Avago Technologies Ltd. and TriQuint Semiconductor Inc. currently are stronger in these so-called BAW filters, which some analysts expect to show faster growth in coming years than the SAW filters Murata is known for.

"The market expects Murata to provide a solution," said Mr. Murata, speaking at an electronics industry trade show near Tokyo. "We still have a chance to take share."

Avago and TriQuint couldn't immediately be reached for comment.

High-end phones often contain more than a dozen radio frequency-filters so they can operate with a variety of frequency bands. Mr. Murata said output of SAW filters was increasing at an annual rate of about 30%, which he said would continue next year.

Overall, Murata's sales rose 23% in the fiscal year ended March 31, to ¥ 1.04 trillion ($8.7 billion).

Analysts say Murata has benefited from economies of scale, helping it undercut would-be rivals with lower prices even though 70% of its production is in high-cost Japan. The new plant is expected to employ up to 300 workers within five years.

Write to Eric Pfanner at eric.pfanner@wsj.com

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(END) Dow Jones Newswires

October 07, 2015 08:15 ET (12:15 GMT)

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