$8.7 billion! Investment of 32 Japanese electronic component manufacturers will increase by 5.4%
As cars continue to adopt more electrical components in everything from hybrid drivetrains to advanced driver-assistance systems, Japan's electronic component makers are expected to increase capital spending by 5.4% this fiscal year.
According to investment plans by 32 companies including Murata Manufacturing, TDK and Kyocera, total spending is expected to reach 1.4 trillion yen ($8.7 billion) in fiscal 2024, up 5.4% from 2023 and 46% from four years ago. Among them, 19 companies plan to increase spending.
Passive components such as capacitors and coils are the focus of investment, accounting for 60%. Investment in this area is expected to reach 867.2 billion yen in fiscal 2024, continuing the high level in fiscal 2023. In particular, multilayer ceramic capacitors (MLCCs) are generally used in smartphones. About 1,000 MLCCs are used in fuel vehicles, about 5,000 are used in fuel vehicles, and about 10,000 are used in electric vehicles.
Japanese companies dominate the global market for these parts. Murata has the largest share of automotive MLCCs, and TDK and Taiyo Yuden are also in the top five. With the rise of South Korean and Taiwanese companies, Japanese companies hope to maintain their market share by maintaining capital investment.
Murata plans to invest 190 billion yen in fiscal 2024 to increase its automotive MLCC production capacity by 10%.
TDK President Noboru Saito said: "Electric vehicles are currently in the adjustment stage, but the use of MLCCs by hybrid and plug-in vehicles will still increase." The company expects capital investment to reach 250 billion yen this year, an increase of 14% from the previous year. TDK's investment will focus on batteries, which account for half of its sales, but about 25% will be allocated to passive components such as MLCCs.
