Dissolve! Murata closed two production bases and bet heavily on auto parts

Source: Huaqiang Microelectronics Author: June

    Introduction: Murata Studio has previously announced on its official website that, in view of the sluggish demand for smart phones, it will close two bases related to coil products. One is Huacheng Electronics, located in Taiwan, China, China; The other is COILTEC in Japan. Also in order to reduce the impact of the downturn in mobile phone demand, Murata is ready to cultivate vehicle parts as the next growth pillar, and invest 15 billion yen to expand sensor capacity in Japan.

    The latest news shows that the above announcement points out that Saitama Murata Manufacturing Group mainly contributes to the development of the communication market through the development and production of coil products. However, with the diversification of smartphone market demand in the main market, as well as the acceleration of product development cycle and the intensification of competition with overseas manufacturers, the operating environment of the Group is becoming increasingly severe.

    After research and discussion, Murata decided to close the overseas subsidiary of Saitama Murata Institute (formerly Tokuo Co., Ltd.), Huacheng Electronics Co., Ltd. (hereinafter referred to as "Huacheng Electronics") on January 31, 2023. At the same time, on April 30, 2023, the Japanese subsidiary COILTEC CO., LTD. (hereinafter referred to as "COILTEC") of Saitama Murata Studio will be closed.

    As the overall planning company of the factory, Huacheng Electronics has always assumed the responsibility of operation and management. COILTEC is responsible for the design, production, sales, development support and testing of coil products and other production equipment. In the future, COILTEC‘s business will be taken over by Saitama Murata Production. Murata believes that the closure of the above two strongholds is expected to have a very limited impact on the company‘s performance this year.

    According to the data, Huacheng Electronics Co., Ltd., located in Taiwan, China, China, is specialized in manufacturing electronic parts such as high-performance mid week transformers, power supplies, coils and metal shells, as well as computer peripheral products. COILTEC is located in Japan and is mainly responsible for the design, production, sales, development support, testing and other businesses of coil products and other production equipment.

    Even if the demand for smart phones stagnates, Murata is ready to develop car parts into the next growth pillar.

    According to the Nikkei Chinese website, Murata Institute will increase the number of vehicle-mounted sensors for automatic driving. It is planned to invest 15 billion yen in factories in Ishikawa Prefecture, Japan, to strengthen production equipment and establish two factory production systems with Finnish subsidiaries by 2027.

     The "inertial sensor" used to detect the acceleration and shaking of the car will be increased by Murata Institute. In 2012, Murata spent about 20 billion yen to acquire Finnish enterprises engaged in inertial sensor business and carried out technology development.

    It is reported that the Murata Institute will enhance the production equipment of the Kanazawa Murata Institute (Baishan City, Shichuan County). About 10 billion yen has been invested in the factories in Baishan City, and the inertial sensor production line will be built. The supply will begin in 2023, and a further 15 billion yen will be invested in 2027 to enhance production capacity.

    According to other reports, as early as last June, the Murata Institute announced that it would build a manufacturing plant for electronic products and automotive electronic components in Da Nang, Vietnam. Excluding production equipment, the total investment in buildings is 4.32 billion yen. The Murata Institute will respond to the medium and long-term growth of the market for electric parts of automobiles by building new factories. The new plant will be constructed from June and is expected to be completed in August 2023.

    It is reported that the new plant is a four-storey building above the ground, with a total construction area of 22000 square meters. Saitama Murata Studio, which was accepted as a wholly-owned subsidiary by Murata Studio in 2016, integrated two Vietnamese production subsidiaries in April and began to build new plants. Components that produce a steady current called inductor will be produced.

    From the perspective of financial statements, the sales of automotive electronic components accounted for 19% in the fiscal year 2021 (as of March 2022) of Murata Institute, and Murata Institute proposed the policy of increasing to 30% as soon as possible.

    In addition, the consolidated revenue of Murata in the last quarter (October to December 2022) shrank 11.1% to 419 billion yen compared with the same period last year, the consolidated revenue decreased 32.2% to 77.3 billion yen, and the consolidated net profit decreased 37.7% to 51.5 billion yen. Murata believes that the total order received in the last quarter was 324.8 billion yen, a significant decrease of 28.0% compared with the same period last year. Because of the large decrease in orders, the continuous decline in the ratio of orders to shipments, and other reasons, Murata will reduce the utilization of capacity, and at the same time revise the financial forecast and capital expenditure.