ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Business

Murata to buy Sony plant to meet demand for iPhone parts

Move designed to keep Samsung and other Asian rivals in check

The iPhone and other smartphones keep getting thinner and adding more functions. The trend is creating demand for ever tinier parts.   © Reuters

TOKYO -- Japan's Murata Manufacturing plans to purchase a plant from Sony to increase its capacity to make high-performance substrates for smartphones such as Apple's iPhone.

The move is designed to keep in check Asian rivals such as Samsung Electronics, whose global presence has been growing. Although Japanese electronic parts makers still have a technological edge over their Asian rivals, they fear that any slowdown in development or investment could cause them to fall behind.

Murata is expected to spend between 30 billion yen and 40 billion yen ($268 million and $357 million) to buy the plant and then expand it. It plans to more than double its substrate capacity by the spring compared to the fiscal 2016 level.

Smartphones are becoming increasingly thinner, and Murata makes unique high-performance parts that can aid in this reduction. The company is betting that boosting production of these parts can help it to sustain its high revenue totals.

Sony used to produce circuit boards for its cameras at the Neagari plant, located in Nomi, in the central Japan prefecture of Ishikawa. It halted production at the plant in 2014 and loaned it to J-Devices, a chip assembler based in Oita Prefecture, in southern Japan. J-Devices has already shifted production away from the plant.

Murata plans to produce its original multilayer resin substrate at the plant. The product was developed as an alternative to those already on the market and allowed Murata to enter the market. The company's technology allows the substrate to be folded origami-like and fit in a tiny space within a smartphone.

As smartphones add more functionality and features, and improve their resolution and other technologies, they require ever smaller parts. For this reason, Murata thinks its space-saving multilayer resin substrate will be adopted by more smartphone and tablet makers.

Murata currently produces the substrate at its plant in Toyama Prefecture, next to Ishikawa, among other places. But it has been struggling to meet demand. The Sony plant is close to Murata's production base in Ishikawa, so after the purchase and update, Murata will be able to quickly shift workers to the new factory and get it up and running.

The plant's expansion will be partly funded by a subsidy from the prefectural government of Ishikawa.

The purchase is part of Murata's efforts to nurture a new line of businesses that will add to its lineup of globally dominant electronic products, such as ceramic capacitors. In September, the company bought Sony's battery business. It also acquired Vios Medical, an American medical device startup that makes small censors.

In November 2016, it bought Japanese substrate maker Primatec, which has since been renamed Ise Murata Manufacturing.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media