After investing 40 billion yen in a new plant in Shimane prefecture at the end of last month, Murata Manufacturing plans to invest $89 million to build a new plant in Okayama Prefecture, which will produce the ceramic raw materials needed for MLCC production. According to industry insiders, Okayama Prefecture is adjacent to Shimane Prefecture, the raw material plant may be set up for the supply of raw materials for the Shimane MLCC Plant.

Previously, the raw materials of the Murata Shimane Plant were supplied by the factories in Omi City, Shiga Prefecture, but as the demand increased, the production capacity of the Shiga Plant has not reached the production demand of MLCC. So Murata invested in Okayama to build a factory to maintain the supply of raw materials needed by the Shimane Plant. Murata said that it hopes to create a complete production chain and differentiate it from Chinese products by improving quality.

Murata’s MLCC has a global market share of 40% and an annual production of about 1 trillion. The growth of electric vehicle sales has driven the demand of MLCC. A pure electric vehicle will require 17,000 to 18,000 MLCCs, which is nearly 6 times more than the 3,000 general fuel vehicles. Murata Manufacturing Co., Ltd. has gradually withdrawn from the general passive component market and accelerated the transfer of products to the automotive electronics market. In order to cope with this, Murata has renovated its plants in the Philippines and Japan in addition to building new plants in Japan. According to Murata, the total production capacity of MLCC is estimated to increase by about 20% in 2019.

According to supply chain news, due to tight global MLCC demand, Murata has sent a letter to authorized dealers, indicating that in order to maintain the labor and equipment costs incurred by the production line operation, MLCC price increases are unavoidable, and supply shortages will continue until 2019. Although Murata has increased its investment to increase productivity, it is still in short supply.