Efforts to Resolve Industry Situation
MLCC manufacturers have been stepping up efforts together with automakers and electric auto parts manufacturers. Murata Manufacturing actively exchange technologies with both parties to solve technological problems. At the same time, it asks them to switch from 1608 and larger sizes, which are mainly used for automotive application to 1005 and 0608 sizes to be able to supply MLCCs under the tight demand-supply situation. Murata aims to improve its supply capability by increasing the number of chips produced from a 200×200mm green sheet.

First, the company will go ahead with the shift to 1005 size starting with MLCCs for ADAS, connected communication devices, and driver recorders. The three parties also endeavor to overcome technological challenges and expedite downsizing of the powertrain (engine) system that is required to support high voltage, which hampers downsizing.

Higher Demand from 5G Devices
With MLCCs for communications devices, although the growth in volume of MLCCs for smartphones, which are the mainstream communications devices, has slowed due in part to the longer replacement cycle, the ratio of Long Term Evolution-Advanced (LTE-Advanced) terminals and 5G-capable terminals has increased, reflecting the advancement in higher functionalities and greater versatility, improvement of IC performance, increase in the number of sensors incorporated, and adoption of more than one camera and larger battery.

Murata Manufacturing forecasts MLCCs for LTE in FY2018 will increase 100 million units on the year to 1.3 billion units (of which, MLCCs for smartphones increasing 10 million units to 1.47 billion units), those for 2G/3G terminals will drop 120 million units to 390 million units — a decrease of 20 million units to 1.69 billion units for mobile phones as a whole. The number of MLCCs incorporated in a terminal has been increasing year by year, from 100 to 200 units in 2G/3G terminals to 200 to 400 units in low-end smartphones, and to around 1,000 units in high-end smartphones. "The introduction of 5G technologies enhances requirements for MLCCs to support higher temperature, higher voltage, and lower profile, and high-quality MLCCs are required," notes Murata.

Additional Capex for Higher Yield
Responding to increased demand for MLCCs in a wide range of markets from automotive to communications, MLCC manufacturers have been drastically increasing investments to increase production. In FY2018, Murata Manufacturing allocates ¥220 billion of its record capital investments of ¥340 billion, an increase of ¥33.4 billion from the previous year, for the production increase of capacitors, batteries and other products.

The company invested a total of ¥100 billion in the Philippine and Okayama plants, which were completed in 2018, and in the construction of additional and new buildings for MLCCs at Fukui, Izumo and Wuxi Plants, whose construction started in 2018. The company targets a 10 percent increase in its global production capacity at the end of Mar. 2019 from the end of Mar. 2017.