Murata plans $2bn strategic investment over three years
05:49, 16 November 2021
Japan’s Murata Manufacturing, the world’s biggest capacitor producer for smartphones, plans strategic investments of JPY230bn ($2bn) over the next three years to maintain its competitive advantage on the back of the rising adoption of the internet of things.
Such an investment is on top of JPY640bn capital expenditure earmarked for capacity expansion and technology improvements, the capacitor supplier for smartphones produced by Apple and Samsung outlined in its 2022-2024 plan.
5G to increase demand for capacitors
Murata estimated that the use of capacitors, tiny parts to store and release electrical charges, will increase by 10%-20% due to 5G adoption, making it of utmost importance to develop products compatible with 5G technology.
“Search new applications and customers for which we can leverage Murata’s strengths in the communications market, which is expanded by the ongoing adoption of IoT [internet of things] and 5G,” the company said in a presentation document.
The 5G technology will also drive demand for filters and front end modules, used in Wi-Fi, global positioning systems (GPS) and radio frequency switch, Murata said. It viewed demand for front end modules tripling by 2025 compared with 2020, while that of filters to double.
Opportunities from autonomous driving
Murata will develop more sensor devices to tap on demand from the emergence of autonomous driving. As the latter gets more advanced, the requirement for sensor technology will increase.
Murata is developing ultrasonic sensors to enable autonomous driving on highways and city roads.
In the automobiles sector, the rising demand for electric vehicles paves well for capacitors. Murata noted that power train in internal combustion engine cars need 300-500 capacitors, while battery electric vehicle requires 2,000-2,500 pieces.
Targeting $17.5bn sales by 2024
Murata expects sales for year-ending March 2022 to reach a record high of JPY1.7trn, and the current developments in the telecommunications and automobiles industries may result in a compound annual growth rate (CAGR) of around 5% over the next three years.
For year-ending March 2025, Murata is targeting sales of JPY2.3trn.
In afternoon trade in Tokyo, shares of Murata rose 1.8% to JPY8,841.