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Electronics

Kyocera goes on offensive with record investment

Japanese electronics maker aims to boost sales to $18 billion in a few years

Kyocera plans aggressive investment into new businesses, including those related to 5G and collaborative robots.

KYOTO -- Kyocera is going on the offensive with an eye toward achieving 2 trillion yen ($18.37 billion) in group sales in a few years, budgeting record outlays for capital investment and research and development in the current fiscal year.

The Kyoto-based electronics maker will spend 170 billion yen on plants and equipment and 90 billion yen on R&D in fiscal 2021 through March 2022 to meet strong demand for its parts and to reinforce new businesses, such as 5G wireless technology and collaborative robots.

Although Kyocera beat Japanese rivals Nidec and Murata Manufacturing to reach 1 trillion yen in group sales first in fiscal 2000, both have since caught up. Annual sales for the three companies are now at 1.5 trillion yen to 1.6 trillion yen. With its aggressive investment strategy, Kyocera hopes to regain growth momentum.

In the January-March period, "our earnings as a whole bounced back almost to the level before the adverse effects of the coronavirus became clear," Kyocera President Hideo Tanimoto said at an online press conference on April 27.

The company foresees a consolidated operating profit of 117 billion yen in fiscal 2021, up 66% from the previous year, on record sales of 1.73 trillion yen.

The company aims to achieve its 2 trillion yen sales target "in two to three years," Tanimoto said.

Strong demand for semiconductors and other electronic parts is behind the bullish forecast. With its background in ceramics, Kyocera's mainline products are components called packages that are used to protect and connect electronic parts.

The company will continue to produce packages at full capacity "for some time" due to their shortages, Tanimoto said. The current pace of production "will run through the current business year," he added.

Kyocera is also enjoying brisk sales of crystal devices and capacitors used in smartphones and wearable equipment, among other products. Orders received for electronic parts as a whole in the January-March quarter totaled 244.3 billion yen, up 9% from a year earlier.

Kyocera decided on the record capital investment to meet growing demand. It will strengthen production at factories, including one for ceramic packages in Satsumasendai, Kagoshima Prefecture, and another for resin and other organic packages in Ayabe, Kyoto Prefecture.

Investment aimed at boosting capacity began in fiscal 2020, with capital spending totaling 117.1 billion yen in the year, slightly above the previous record of 117.0 billion yen, posted in fiscal 2018.

The R&D outlay for the current fiscal year exceeds the previous high of 79.2 billion yen by more than 10 billion yen as Kyocera is promoting a wide range of new businesses. The company plans to develop products and services related to collaborative robots that work with humans, 5G networks for factory automation and other limited-area services, and high-speed inkjet printers used in advertising and other commercial printing.

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