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Murata wants to build from MEMS to Internet of Things

May 28, 2012 // Peter Clarke

Murata wants to build from MEMS to Internet of Things

Murata Manufacturing Co. Ltd., has been on the acquisition trail for several years and it is now fine tuning its approach as it seeks to move up in complexity and value through MEMS to the Internet of Things (IoT).

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Murata (Kyoto, Japan) is often billed as a passives-to-power-supplies giant. With annual sales of 584.7 billion yen (about $7.34 billion) in the year to March 31, 2012, Murata is definitely a giant and one that is well known for its multilayer ceramic capacitors, but it makes a broad range of components including wireless modules and a variety of sensors.

In an interview with president Tsuneo Murata, conducted during his visit to the newly acquired MEMS manufacturer VTI Technologies Oy (Vantaa, Finland) here as it was renamed Murata Electronics Oy EE Times asked Murata about the company's acquisition strategy.

Was it about moving away from passives and up in terms of complexity and value? "Murata has produced sensors for 20 years. But without creating such good quality as VTI," said Murata. "Yes we are going to go in that direction but not go too far away from the original business."

And Murata emphasized that it is not just about the product complexity and value but also about the end markets. "In the case of VTI they are very strong in automotive and industrial, areas where Murata is not so strong."

Murata's strengths traditionally lie in communications and consumer applications with 45 percent of sales in communications, 19 percent in PCs and peripherals and 10 percent in audio-visual consumer electronics, Murata said. About 75 percent of VTI sales are into the automotive sector where it is a leading supplier of accelerometers, gyroscopes and combo units for electronic stability control (ESC).

Murata acquired VTI, which manufactures MEMS on 150-mm diameter wafers, in January 2012 for about 20 billion yen (about 190 million euro or $260 million) in cash, so what does the company intend to do with it?

"We want to reinforce the business in automotive. Then we want to have new products in the consumer area," said Murata. Murata said automotive is good business and expanding as the electronics content of automobiles goes up. Providing MEMS to the consumer sector will be a next step. The consumer market is quite different to the automotive and medical sectors where VTI has been strong, characterized by less demanding specifications but thin margins and downward price pressure. "It's very tough to compete [in consumer]. We need to have a good strategy," said Murata. "To get into consumer we may need to utilize some outsourcing," he added.
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