Murata buying US power chip venture in bid to diversify
Japanese electronics parts maker looks beyond smartphones for growth
OSAKA -- Murata Manufacturing plans to purchase American startup Arctic Sand Technologies for about 7 billion yen ($61.8 million) in a step to reduce the Japanese company's dependence on smartphone parts.
The Massachusetts Institute of Technology spinoff was founded in 2011 and is strong in energy-saving and miniaturization technologies for power management chips, used in information technology equipment and automotive electrical modules.
Murata now generates roughly 60% of its sales from smartphone parts. It seeks to cultivate the business of power semiconductors, with their wider range of applications, to build a structure for steady growth. Arctic Sand power chips are seen finding use in areas including personal computers, home electronics, small communications base stations and automotive control devices.
In voltage control, Arctic Sand's offerings employ capacitors in power storage components to save energy. This cuts electricity consumption in voltage conversion by around 10%, and the chips themselves can be shrunk to a twentieth the usual size.
Murata's mainstay operations in ceramic capacitors and communications equipment components rely disproportionately on smartphones -- a highly competitive field with a fickle market climate. So the company is shifting focus to power chips, where prices are likelier to hold steady and stable growth can be expected.
Arctic Sand technologies would enable Murata to offer modules with greater added value. Murata has positioned the voltage conversion parts business, which includes power semiconductors, as a pillar of growth. But in fiscal 2015, the segment accounted for just 4% of overall sales. Murata hopes to leverage the acquisition to increase power chip sales to an annual 10 billion yen within five years.
Murata is also working to cultivate the power business, including a Sony lithium-ion-battery operation it is acquiring, as a key source of earnings.