October 16, 2018 / 9:09 AM / in a month

Japan's Murata expects ceramic parts shortages to last another 2 years

CHIBA, Japan, Oct 16 (Reuters) - Japanese electronics components firm Murata Manufacturing Co Ltd expects shortages of tiny ceramic components to last for another two years, its CEO said, in what could be a bottleneck in the advancement of the global automotive market.

Murata Manufacturing, an Apple Inc supplier, is the world’s biggest provider of multi-layer ceramic capacitors (MLCCs), tiny parts that control the flow of electricity in a variety of products including cars, smartphones and laptops.

Demand for MLCCs has surged as an increasing number of electronic devices are installed in cars, resulting in supply shortages across industries including automakers and smartphone makers.

“Even though MLCC makers have been boosting capacity, it would take time to meet a level of demand that we are seeing now,” Murata Manufacturing Chief Executive Tsuneo Murata told Reuters in an interview on Tuesday.

Murata said MLCC supplies have been particularly tight in the automotive industry, forcing some customers to wait as much as four or five months for orders to be delivered.

Several thousand MLCCs are needed per vehicle, compared to around 1,000 units per smartphone. MLCCs in cars are also much larger than those in smartphones.

“As cars become more electrified and automated, MLCC demand is likely to expand over an extended period of time,” he said.

Murata Manufacturing controls about 40 percent of the global MLCC market, followed by Samsung Electro-Mechanics Co of South Korea and Taiyo Yuden Co of Japan.

Murata Manufacturing has been adding production capacity of about 10 percent every year over the last decade, and plans for an increase of at least another 10 percent for the next year. The company has said it will be investing 220 billion yen ($1.96 billion) to boost capacity for MLCCs and batteries before the end of the current fiscal year in March 2019.

“But we have limited resources. Our workforce and facilities have been stretched,” Murata said. ($1 = 112.1300 yen) (Reporting by Makiko Yamazaki and Yoshiyasu Shida; Editing by Muralikumar Anantharaman)

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