Date Visited: October 6, 1993
Report Author: M. Kelly
Murata is a leader in the production of discrete electronic components. The primary market for Murata products is Japan (63%), followed by the United States (11%), Europe (10%), and Asia (most of the remaining 16%). The company strategy is to pursue manufacturing within the geographical spheres of its primary customers. The Murata group includes 23,000 employees and 47 affiliates, including 23 overseas; Murata Erie North America, for example, has two plants in Georgia, one of which makes capacitors and the other of which makes passive electronic components. Based on information contained in the 1993 annual report, the primary product groups in Murata are the following:
Murata sales total about $2.7 billion annually, with capacitors representing 38% and piezoelectric components 20%. We were told that Murata dominates world market share of ceramic filters/ceramic resonators (85%, $100 million/mo), capacitors (50%), thermistors (40%), and EMI suppressors (30%).
Murata's product strategy is to continue to build on its strengths and move aggressively to be a supplier of complete functional modules. In pursuit of future objectives, Murata is spending 6.5% of sales, about $176 million, on R&D.
Murata's primary R&D domains include
Murata's strategic technologies are identified in Figure 7.5. Other areas considered important by Murata include module circuit application-specific components and vertical technology integration within the company.
As of the JTEC visit, recent capital investments had been made for the production of ceramic materials, monolithic ceramic capacitors, components for imaging equipment, chip components, microwave components, and electronic modules. Aggressive capital investments were also made for thin-film processing technology and the development of equipment for gallium-arsenide semiconductor devices.
At the time of the JTEC visit, Murata planned to have a gallium-arsenide integrated circuit pilot line in production by the end of 1994. The motivation for establishing the line, as expressed by our hosts, is to protect intellectual property and to improve Murata's competitive posture in the microwave and RF module business by focusing on future personal communication products.
Murata is doing extensive work in sensor development. Present applications for sensor products include engine knock detectors and fire and burglar alarms. An advanced sensor application that was discussed is a piezoelectric gyro for sensing angular accelerations. The current product measures 21.5 x 8 x 8.5 mm and is used in the Sony TR2 and TR3 palm-sized camcorder for vibration stabilization. A larger, more accurate version (24 x 24 x 58 mm) is used in Pioneer's automobile GPS navigation systems. Future markets for Murata sensors include accelerometers and chemical/gas detection.
A new silicon micromachining program has been initiated at the Yokohama R&D Center to develop microminiature accelerometers, sensors, and oscillators.
The manufacturing lines JTEC panelists toured in Kyoto are most impressive. The total process is automated. The equipment appears to be very robust and capable of handling very high-volume throughput. Over 80% of the equipment being used was designed and built by Murata. Much of the equipment is customized to meet specific product requirements, which justifies the in-house development; however in more general terms, Murata recognizes the importance of internal equipment development in order to protect its competitive advantages. There was evidence of continuous improvement in the manufacturing processes, with particular emphasis on equipment improvements.
Murata has evidently mastered the manufacturing process for high-volume, miniaturized discrete components. Perhaps this explains its dominance in the world market. There was nothing magic about what we saw: outstanding equipment designed for automation, meticulous attention to detail, continuous improvement, qualified personnel, and a committed management team.
It became very evident during our discussions that Murata places a very high priority on customer interactions. It was pointed out that in some cases Murata people visit customers once or twice a day. Procurement planning is regularly updated, and Murata can expect at least a three-year lead time from customers for new product requirements. It was likewise evident that the needs of suppliers were taken into account when negotiating reduced costs. Suppliers, it was stated, are no good to us if they are driven into bankruptcy. Suppliers are considered part of the team and expected to contribute to the competitiveness of the product.
The visit to Murata substantiated much of what has been identified as Japanese strengths:
Murata, like other Japanese companies visited, was concerned about the effects of the recessionary period that industry was experiencing at the time of the JTEC visit. The attitude of our hosts, however, was very positive about the future of Murata. If anything, I expect that the present economic climate will strengthen the company and better prepare it for the competitive challenges of the future.