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(Bloomberg) — Murata Manufacturing Co. warned that the global technology buildout will eventually lose steam even as the maker of high-end AI components raised its profit outlook.
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The current pace of spending by the world’s largest data center operators won’t last because of increasing competition and debt levels, the company’s president, Norio Nakajima, told an earnings call Friday. The company posted 81% growth in its data center business and said it expects further gains, spurred by a weakening yen.
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“We don’t think the investments that hyperscalers currently have planned for the year will necessarily proceed exactly as envisioned,” Nakajima said. “We are likely to see revisions to plans and delays.”
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Murata’s high-end products are sought after by data center builders, making it the leading global supplier of multilayer ceramic capacitors (MLCCs), an essential component for every device that uses electricity because it regulates power flow.
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The Kyoto-based company raised its full-year profit outlook on Friday to ¥430 billion ($2.7 billion), up from a previous forecast of ¥380 billion. It posted June-quarter operating profit of ¥98.5 billion, beating the average analyst estimate.
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But Murata is struggling to fill orders. Its closely watched MLCC book-to-bill ratio, a comparison of new orders and products shipped, rose to a record high of 1.47 in the June quarter.
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Executives have said the company is working to raise output by boosting investment and converting production lines from smartphone capacitors to those used in AI servers. The company said Friday it will spend an additional ¥5 billion this year, raising capital expenditure to ¥255 billion.
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Murata executives remain confident in the company’s technological lead over Chinese rivals, particularly in high-end products. They say years of working with smartphone makers have enabled the company to shrink component sizes while increasing energy storage, which is hard to match.
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(Updates with executive comments from the first paragraph.)
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