This capacitor is produced in a factory overseas. Its capacity is very small.
Ans: Yes, it is also ambiguous, wordy, and obscure. The term "Its" can also refer to "a factory overseas" because the word "capacity" can refer to production. However, somebody who is not familiar with electronics may understand that "Its" refers to "This capacitor."
However, the word "oversea" is adjective. It should be "an overseas factory." Right ?
Actually, many sources in electronics use the words Low Capacitance and High Capacitance. They have never used the words “small capacity”, “big capacity”, or “large capacity”.
I prefer the use of “relative clause” as follows.
This capacitor which is produced by an overseas factory has very low capacitance.
With participle phrase, the sentence can be like this.
This capacitor produced by an overseas factory has very low capacitance.
PS. You should study the collocations from the reliable sources like international journals in electronics.
For examples:
If a capacitor has very high capacitance, then a small difference in plate voltage will lead to a huge difference in the number of electrons (total charge Q) on the two plates [1].
Capacitors are also made from thin sheets of mica, with silvered surfaces; these have low capacitance [2].
References
[1] Khan Academy.
https://www.khanacademy.org/science/in-in-class-12th-physics-india/in-in-electrostatic-potential-and-capacitance/in-in-circuits-with-capacitors/a/capacitors-article
[2] Elsevier Website
https://www.sciencedirect.com/topics/engineering/capacitance