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MONDAY, December 11, 2023

Thailand to become base for Murata MLCC production

Thailand to become base for Murata MLCC production
TUESDAY, September 26, 2023

Thailand is set to become one of Japanese firm Murata's key manufacturing bases for multilayer ceramic capacitors (MLCC) production for the global market, Murata Electronics (Thailand), the manufacturing subsidiary of leading electronic components provider Murata Manufacturing, revealed on Monday.

The announcement came as the company opened its new production plant in the northern province of Lamphun.

Hirokazu Sasahara, Murata Electronics (Thailand) managing director, said the new facility will manufacture multilayer ceramic capacitors, a flagship product of the Japanese firm, which boasts a global market share of 40%.

MLCC is a fixed-value capacitor in which the dielectric is ceramic. It is composed of two or more alternating ceramic layers and a metal layer that serves as an electrode.

(from left) Hirokazu Sasahara and Norio Nakajima

He explained that multilayer ceramic capacitors are essential components in almost all electronic devices and are widely used in smartphones, wearable devices, and other electronic devices, adding that 1,000 to 1,200 of these capacitors can be installed in high-end smartphones, reflecting the growing demand for miniaturisation and increased capacity.

“They are very important components and are essential if electronic equipment is to run stably and smoothly," he said, adding that the company plans to expand the plant in Lamphun, Thailand.

Thailand to become base for Murata MLCC production

The newest Murata plant represents phase one of the company’s project. Worth approximately 125 million baht, it has the capacity to produce 30 billion MLCC per month.

The major export markets for this Thailand plant will be China and Asean.

The plant will begin full production in November before expanding to full capacity within five years as the plant's second phase is developed. Murata's total capacity worldwide is currently 150 billion MLCC per month.

He noted that Murata has set aside 30 billion baht to build Murata’s plant in Lamphun’s World Industrial Estate, which spans 400 rai (around 158 acres).

With the proliferation of 5G-enabled smartphones, as well as the increasing sophistication and miniaturisation of electronic devices such as wearables and electric vehicles, Murata is confident that its expansion in Thailand will meet the growing demand for further miniaturisation and higher densities of electronic circuits.

According to Sasahara, Murata will increase capacity for multilayer ceramic capacitors at an annual rate of approximately 10% per year on a capacity load basis in the medium to long term to prepare for the expansion of the electronics field.

He added that the expansion will require Murata Electronics (Thailand) to hire approximately 2,000 people in the coming years.

With the completion of this new production building, Murata will have four capacitor production sites overseas, in China, Singapore, the Philippines, and Thailand, in addition to two in Japan.

Thailand to become base for Murata MLCC production

Thailand is Murata's largest MLCC production plant, reflecting the company’s intention to make Thailand the key production base in the Southeast Asia region to serve global demand.

“The MLCC production plant in Thailand will be outfitted with cutting-edge technology. We intend to build up the plant into a fully integrated MLCC production base from upstream to downstream,” he said, stressing Murata's determination to co-create with Thailand and share its technology.

Murata Manufacturing president Norio Nakajima said that the move allows Murata to diversify its supply chain, ensuring stable and continuous delivery through production at multiple sites.

Thailand to become base for Murata MLCC production

“Murata Electronics (Thailand) will be one of MLCC's most important factories. Establishing a new factory in Lamphun is a significant step towards our continued growth,” he said, adding that products will be shipped from Lamphun all over the world.

Meanwhile, in addition to expanding its production plant in order to maintain its leadership position among global electronic component providers, Nakajima pointed out that the company spends 7% of its annual revenue on research and development.

“For that reason, I am confident that other competitors must still follow our lead.”

Asked how he sees MLCC revolving, he said the capacitors will tend to be smaller but more efficient, which will open up more possibilities for future smart electric devices.

Junichiro Kuroda

Junichiro Kuroda, director of the Japan External Trade Organization's (Jetro) Bangkok Office, welcomed the new expansion, pointing out that the new plant will mark the beginning of a new development and a more stable relationship between Thailand and Japan.

He believes that Murata’s expansion will significantly reduce risk in the company’s supply chain while accelerating production to meet the market’s growing demand.

He promised to continue supporting and encouraging potential Japanese businesses and investors to come to Thailand, noting that companies that have already invested in Thailand tend to increase their investment to upgrade and improve their facilities in Thailand, as Murata has done.

For new investors, Kuroda said that the Japanese are looking for collaboration with Thai potential industries such as medical, agriculture, and startups.

"We want to make a good matching and partnership between Thailand and Japan companies including startups," he said.

He also hoped that the new Thai government would continue to invest in infrastructure, innovations, and skilled labour so that Thailand could attract more high-end investment.

However, he urged the government to consult with all relevant stakeholders, both domestic and international, before implementing new policies such as minimum wage increases, in order to avoid undermining Thailand’s competitiveness.

Murata Manufacturing is a global leader in the design, manufacture, and sale of ceramic-based passive electronic components and solutions, as well as communication and power supply modules.

The company is dedicated to the creation of advanced electronic materials as well as cutting-edge, multi-functional, high-density modules. It employs more than 73,000 people and operates manufacturing plants all over the world.

During the fiscal year 2022, the company earned more than 1.8 million yen.