Japan’s Murata Manufacturing Co., a major iPhone parts maker, said on Monday it would make a “strategic investment” worth 230 billion yen ($2.02 billion) over the next three years as the company invests in smartphones and smartphones, the Nikkei Asian Review reported. part of the IoT value chain effort.

Norio Nakajima, president of Murata Manufacturing, said the strategic investment will include mergers and acquisitions and capital cooperation. The amount set aside will also be used for other long-term goals, such as internal digital transformation and decarbonization efforts.

Under a plan covering fiscal 2022-24, the funding builds on top of a regular investment of 640 billion yen to maintain and expand the capacity of existing businesses.

Under the plan, the company hopes to grow sales by 16 percent to 2 trillion yen over the next three years, while maintaining an operating margin of 20 percent or higher. In the current business year, which ends in March, Murata forecasts record sales and operating profit for the second year in a row.

Murata is the world’s largest supplier of capacitors, the tiny components that store and release electrical charge in smartphones and other devices. The Kyoto-based company has been expanding into other smartphone components, such as radio-frequency devices that send and receive radio signals, in an area that faces competition from the likes of Qualcomm and Broadcom.

Murata noted that demand for such devices, or front-end modules, will triple between 2020 and 2025 as fifth-generation technology promises to expand internet connectivity to more aspects of modern life, including cars and factory machines.

Nakajima told an analyst conference that Murata is keen on mergers and acquisitions and capital cooperation “if they can help Murata offer a different product from its competitors”. Murata competes with wireless tech giants for orders, with smartphone makers such as Apple, Huawei, Samsung and Oppo releasing new products every year. Nakajima said the company is poised to acquire unique technology that is critical to winning the order.

Murata has done this in the past. In 2016, it took over Primatec to get the technology to make the bendable substrates used in the latest iPhone models.

Murata Manufacturing Co. separately announced on Monday that it has started construction of a capacitor production plant in Thailand to diversify its production base. Murata, which already operates a factory in Thailand that makes sensors and other electronics, is building a new production facility nearby to make the company’s flagship product, multilayer ceramic capacitors.

Currently, its production is concentrated in Japan and China. A Murata official said the new plant, which will be operational in October 2023, is designed to “better balance production between Japan, China and Southeast Asia.”

Construction of the new plant in Thailand will cost 12 billion yen, but Murata did not disclose the cost of land acquisition for the new plant.

The construction is part of Murata’s efforts to diversify production away from China. In the year to March, the company’s sales in Greater China accounted for 58% of total sales.

“The global economy could decouple between one country led by the United States and another country led by China. We have to prepare for any type of risk,” said Norio Nakajima.

“China has the largest labor and consumer market in the world today. In 2030, India, Southeast Asia and Africa will also emerge. We need to prepare for that,” he said.