According to Nikko Industries, Japan's MLCC Major Factory, Murata, is planning to build a new factory in Okayama Prefecture at 10 billion yen ($89 million) after investing 40 billion yen to build a new plant in Shimane Prefecture late last month. The factory will be responsible for the production of ceramic materials for laminated ceramic capacitors, and Okayama and Shimane adjacent counties, may be set up for the raw materials of the Shimane plant.
At the end of September, Murata announced the construction of a new plant in Shimane County to increase production capacity. He also won a subsidy of 420 million yen for equipment and invested 10 billion yen in raw material plants in Okayama County, adjacent to Shimane County. The raw materials factory in Okayama will introduce the processing of powdered minerals and processing equipment that stores electrical characteristics. The new plant will be completed in October 2019, but Murata did not announce its future capacity.
According to the Japanese Economic News, the raw materials used by the Shiga plant were supplied by factories in Shiga Prefecture near Jiangsu, but as demand grew, the supply of Shiga plants fell short of demand. So Murata invested heavily in Okayama to maintain the raw materials needed by the island plant. Murata says it hopes to create a one-stop production system that differentiates between quality and Chinese-made products.
Murata's MLCC has a global market share of 4, with an annual output of about 1 trillion. The growth of electric vehicle sales has led to MLCC demand. A pure electric vehicle will require 17,000 to 18,000 MLCC, nearly six times more than the 3,000 in a regular fuel vehicle. In response to Murata's gradual withdrawal from the general passive component market and the accelerated transfer of its products to the automotive electronics market, in addition to building new plants in Japan, Murata has also renovated its factories in the Philippines and Japan, and is expected to increase production capacity by about 20% by 2019.
As global demand for MLCC is tight, Managing Director Kenzokumura Goodman said at a financial briefing that MLCC capacity is very busy and fully open. At one point, a letter was sent to distributors indicating that MLCC price increases were unavoidable in order to maintain the labor and equipment costs associated with the production line. Supply shortages would continue until 2019. Although Murata had invested heavily to increase productivity, supply was still in short supply, reminding customers to look for other sources of supply.
This year has been a big success for Murata, with record results from April to June 2018, especially in the MLCC-based capacitor sector, with sales up 31.3% to 126.5 billion yen from the same period in 2017.