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Japan's Murata to spend nearly $100m on parts factory

OSAKA -- Murata Manufacturing will kick up production of smartphone components that are indispensable to advances in the functionality of the mobile devices.

     The Japanese company will spend roughly 12 billion yen ($98.7 million) building a new facility that will make surface acoustic wave (SAW) filters and other smartphone components. These filters are essential for high-speed communications, and Murata controls roughly 45% of the global market.

     Construction of the facility will start next month at a plant owned by subsidiary Kanazawa Murata Manufacturing in Ishikawa Prefecture, with completion set for September of next year. Kanazawa Murata will hire around 300 people in the five years starting in fiscal 2015 to support the production expansion.

     Murata also holds about a 35% global share in ceramic capacitors, another component used in smartphones. The company's share of the capacitors and SAW filters used in iPhones appears to be higher still.

     Smartphones are continuing to advance, supporting high-speed services such as Long Term Evolution. One device can handle frequency bands that differ by country and region. SAW filters are needed to support that functionality. High-end handsets can contain 15 to more than 20 of them, 4-5 times that of cheaper devices.

     Murata plans to ramp up production capacity of SAW filters by 30% on the year in fiscal 2015.

     Global shipments of smartphones have softened amid the maturation of the Chinese market. But as smartphones become more cutting edge, demand for components is expected to remain strong.

(Nikkei)

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