₱3-Billion Japan Smartphone Chip manufacturing plant Ready for Operation in Batangas

PHILIPPINE ECONOMIC Zone Authority Director-General Lilia B. De Lima and Tsuneo Murata, Murata Manufacturing Co. Ltd. president, unveil a plaque at the plant opening in this official photo release on the event

Murata Manufacturing Co., Ltd. of Japan yesterday announced the completion of its initial ₱3-billion investment in a manufacturing facility; it's largest in Asia outside Japan at the First Philippine Industrial Park in Tanauan, Batangas.  Philippine Manufacturing Co. of Murata Inc. (PMM) completed the first of four buildings where it plans to employ 3,000, notwithstanding the current slump in electronics sector.

PMM will initially produce multilayer monolithic ceramic capacitors (MLCCs), Murata's flagship product.

Murata president Tsuneo Murata said PMM would produce other components in the future.

The plant would be a production hub of MLCCs for emerging markets. Murata of Japan is the leading manufacturer of MLCCs, with global market share of 35 percent. It also produces components used in most electronic and electrical devices such as notebook computers, mobile phones, television sets, cameras, and other home appliances.

The entire facility covers 22.7 hectares, where the first building occupies 3.6 hectares. The first building will start operations in January 2013 where it would employ 300 workers, mostly as operators.

Murata said when fully operational, the factory will be able to produce a variety of models in representative scales, which would increase the company's production.

Murata said this expansion in this part of the world is in response to the increased functionality of electronics and the growing demand for new applications such as smartphones and tablets.

As Murata's overseas production base, the Philippine operations would have a critical role part in Murata's expanding overseas production, the company said.

The company said it decided to locate in the Philippines due to its low-cost (low wages, lower capital investment) operations and to take advantage of a large-high-quality and English-speaking workforce with high-retention rate.

As a company registered with the Philippine Economic Zone Authority, the company would also be able to enjoy favorable treatment in corporate taxes and materials and equipment imported from Japan.

The Philippine plant is Murata's fourth in Asean, the others are in Thailand, Singapore and Malaysia.

PMM president Takashi Masuda said the Philippine plant has the largest lot area where the company would be able to expand its products and its scale in the future.

Masuda said the company plans to build three more buildings, totaling four buildings which would have 3,000 workers in the future.

A multiyear ceramic capacitor is an electronic component that stores and releases electrical energy. It stabilizes voltage by going through a charge-discharge cycle and is widely used to absorb noise and detect signals of certain frequencies.

Chip type multilayer ceramic capacitors are essential components for electrical equipment.  It is said that there are more than 500 MLCCs are assembled into one latest smart phone; 1,000 to 2,000 in a car; 700 in a laptop, and 500 in an LCD TV.

These products are produced for major EMS (electronic manufacturing services) and local manufacturers where Murata faces intense competition against Asian suppliers.

Murata said these competitors include Samsung Electronics Manufacturing of Korea and Yageo of Taiwan.

Murata Manufacturing of Japan is a worldwide leader in the design, manufacture and sale of ceramic-based passive electronic components and solutions, communication modules and sensors.

It has an annual revenue of 585 billion yen ($7.1 billion). The Kyoto-based company has 78 subsidiaries and sales offices worldwide where it has 37,000 employees.

About 85 percent of products sold by Murata are produced outside of Japan. Forty percent of all its product lines go to communication application.

Murata is also expanding in Thailand and Malaysia so far, Masuda said but the Philippines has the biggest potential for expansion.

Amid the slowdown of Philippine electronics exports, Masuda said the electronics industry in the Philippines will further expand and develop and that there are emerging countries they would require more electronic components and devices.

Lilia de Lima, director-general of the Philippine Economic Zone Authority, said the initial investment could add p to ₱3 billion as the company spent almost ₱2 billion just for the land development and the building.

Malaya