Murata, a key supplier of electronic components to tech giant Apple, is set to establish a new production base in Thailand for multilayer ceramic capacitors (MLCC), in a strategic move to mitigate business risks associated with geopolitical tensions and the ongoing “tech war.” The investment of 2.4 billion baht is expected to create over 2,000 jobs in the region.
Murata Electronics Thailand Co Ltd, a subsidiary of the Japanese electronics giant Murata, announced last week that its new manufacturing facility, situated at the World Industrial Estate Co Ltd in Lamphun province, will commence operations on November 25.
The new factory is dedicated to the production of MLCC, which are crucial components that enhance the stability of various mobile devices, including smartphones, computer servers, data sensors, automobiles, and satellites. MLCCs are integral to a wide array of electronic devices and enjoy a substantial global market share of up to 40%.
The ongoing geopolitical tensions between the United States and China, often referred to as the “tech war,” have disrupted the electronics industry. As a response to these challenges, Murata and several other foreign companies have chosen to relocate their production bases from China, and Thailand has emerged as a favorable destination.
Once the construction of the new manufacturing facility is complete, Murata aims to strengthen its MLCC production bases across four countries, including Wuxi in China, Singapore, Thailand, and two locations in Japan, Fukui and Izumo. This expansion not only bolsters Murata’s global supply chain but also signifies a significant milestone in the electronics industry within Thailand.
Murata’s plans include expanding its production capacity by 10% annually. Over the past decade, the company has already increased its MLCC production more than threefold to meet the growing demand for MLCC components, driven by the adoption of 5G technology, the proliferation of internet of things (IoT) devices, and the increasing use of electronics in various applications such as smartwatches, computers, servers, and automotive electronics.
In high-end smartphones, for instance, each device can require as many as 1,000-1,200 MLCC units. Additionally, with the surge in electric vehicles (EVs), which may require up to 10,000 capacitors per vehicle, Murata, currently holding a market share of more than 50% for MLCCs in EVs, is well-positioned to meet this demand.
Many foreign companies, pressured by political considerations and the “tech war” between the US and China, are diversifying their manufacturing bases, with a particular interest in investing in ASEAN countries. Japan, in particular, has significantly increased its investments in Thailand over the past 30 years.
Murata Electronics Thailand’s new manufacturing facility in Lamphun province will cover an area of 64 hectares and is valued at over 2.4 billion baht. Production is set to commence in November, with an initial production capacity of 2 million units per month. The company aims to scale up to 30 billion units per month by 2028, a significant expansion that will lead to the creation of an additional 2,000 jobs in the region.
Hirokatsu Sasahara, managing director of Murata Electronics (Thailand) Co Ltd, highlighted that Murata was the first Japanese company to invest in Lamphun province 35 years ago. Their continuous investments have positioned them as leaders in the local industry. Between 2020 and 2022, Murata’s investments amounted to 6.93 billion baht, representing 10% of the total investments in Northern Thailand and 40% of the investments in Lamphun province. Furthermore, Murata has been actively collaborating with local educational institutions to promote the development of skilled labor in the region.
This investment underscores Murata’s strategic partnership with Thailand and Japan, emphasizing co-creation for future industrial investments. As part of this initiative, Murata is encouraging potential Japanese investors to expand their investments in Thailand to support the development of manufacturing capabilities.
Junichiro Kuroda, president of the Japan External Trade Organization Bangkok office, has stressed the importance of the Thai government’s comprehensive approach, which involves both domestic private entities and foreign investors. This approach is crucial to maintaining Thailand’s competitiveness in the region. The focus lies on enhancing infrastructure, continuous innovation, and fostering a highly skilled workforce to attract future investments in various emerging industries, including medical technology, agriculture, and startups.
The investment by Murata in Thailand not only represents a significant milestone for the company but also demonstrates the attractiveness of the region as a key player in the global electronics industry. With a focus on innovation and a growing demand for electronic components, this strategic move is expected to bolster the economy and create new opportunities in Thailand.