The Change in Electronics Cross-boarder trade and investment in the Asia-Pacific region October 26 , 2007 at Kyoto University (Katsura) Hiroshi IWATSUBO GM , Corporate Planning Corporate Profile Head Office: Kyoto Establishment October 1994 Incorporation December 23，1950 Sales Amount: 69,376 M JPY (as( of March 31, 2007) *Overseas Sales Amount 73％ Affiliated Companies: 56 (as( of March 31, 2007) (23 in Japan and 33 overseas) Employee: 27,453 (as( of March 31, 2007) (Japan 18,461、Overseas 8,992) 2 NetworkNetwork inin JapanJapan Hakui Murata Manufacturing Co., Ltd. Komatsu Murata Manufacturing Co., Ltd. Kanazu Murata Manufacturing Co., Ltd. Sabae Murata Manufacturing Co., Ltd. Anamizu Electronics Industries, Ltd. Tome Murata Izumo Murata Manufacturing Co., Ltd. Fukui Murata Wakura Murata Manufacturing Co., Ltd. Manufacturing Co., Ltd. Manufacturing Co., Ltd. Himi Murata Manufacturing Co., Ltd. Iwami Murata Manufacturing Co., Ltd. Toyama Murata Manufacturing Co., Ltd. Kanazawa Murata Manufacturing Co., Ltd. Okayama Murata Manufacturing Co., Ltd. Asuwa Electronics Industries, Ltd. Azumi Murata Manufacturing Co., Ltd. Ogaki Murata Manufacturing Co., Ltd Tokyo Branch International Sales Department, Tokyo Branch Yokaichi Plant Head office Yasu Plant Murata Electronics Co., Ltd. Yokohama Technical Center Nagaoka Plant Head office Research Center for Next Branch / Plant ( MMC ) Generation Technology Research Center Sales Office Subsidiary Sales Office of Subsidiary 3 GlobalGlobal NetworkNetwork Murata Electronics (UK) Ltd MurataM Electronicsr (Netherlands) B.V. Murata Europe Management B.V. Murata Europe Management B.V. Copenhagen Office MurataM Electronicsr (Netherlands) B.V. Stockholm Office MurataM Electronicsr (Netherlands) B.V. Helsinki Office Murata Elektronik GmbH Murata Electronics Switzerland AG Beijing Murata ElectronE ics Co., Ltd Murata Elektronik GmbH Budapest Office Murata Electronicectro s Trading (Tianjin) Co., Ltd MurataMu Electronics North America, Inc. MurataMura Elettronica S.p.A Korea Murata Electronics Company, Limited MurataM Electronicsr (Netherlands) B.V.Barcelona Office SyChip,SyChip Inc. Murata Manufacturing Co., Ltd. Murata Electronique S.A. SyChip Shanghai,Shanghai Inc. Murata Electronics Trading (Shanghai) Co., Ltd WuxiWu Murata Electronics Co., Ltd. Murata (China) Investment Co., Ltd Murata Electronics Trading Suzhou Murata Electronics Co., Ltd. Murata Electronics North America,Inc. Mexico, S. A. de C. V. Murata Electronics Trading (Shenzhen) Co., Ltd Taiwan Branch Murata Electronics (Thailand),(Thaila Ltd. Murata Electronics Philippines Inc. Thai Murata Electronics Trading,Tradi Ltd. Taiwan Murata Electronics Co., Ltd.. Murata World Comercial Ltda. Murata Electronics (Malaysia) Sdn.Bhd. Hong Kong Murata Electronics Co., Ltd. Murata Amazonia Industria Murata Trading (Malaysia) Sdn.Bhd. E Comercio Ltda. Murata Electronics Singapore (Pte.) Ltd.. Murata Co., Ltd. Murata Amazonia Industria E Comercio Ltda. Murata Eletronica Do Brasil Ltda. Head Office Sales Office and Production Plant Production Plant Sales Office Technology Developing Plant 4 Production and Sales Offices in Greater China Beijing Murata Electronics Co., Ltd. Murata Electronics Trading (Tianjin) Co., Ltd. Dalian Office Murata Electronics Trading (Tianjin) Co., Ltd. Beijing Office Murata Electronics Trading (Tianjin) Co., Ltd. Murata Electronics Trading (Tianjin) Co., Ltd. Qingdao Office Murata Electronics Trading (Shanghai) Co., Ltd. Wuxi Murata Electronics Co., Ltd. Murata (China) Investment Co., Ltd. Murata Electronics Trading (Shanghai) Co., Ltd. Suzhou Office Murata Electronics Trading (Shanghai) Co., Ltd. Hangzhou Office Murata Electronics Trading (Shenzhen) Co., Ltd. Xiamen Office Taiwan Murata electronics Co., Ltd. Taipei Office Taiwan Murata electronics Co., Ltd. Shenzhen Murata Technology Co., Ltd. Hong Kong Murata Electronics Co., Ltd Murata Electronics Trading (Shenzhen) Co., Ltd. Murata Company Ltd (Hong Kong） Regional Head Office Sales Office and Production Plant Production Plant Sales Office 5 MajorMajor ProductsProducts ofof MobileMobile CommunicationCommunication SAW FILTER First Intermediate First Intermediate Low Noise Amp Receiving Circuit Interstage Filter Frequency Filter Frequency Filter GaAs MMIC Dielectric Filter Surface Acoustic Wave Filter Ceramic Filter Chip Dielectric Antenna Chip Multilayer LC Filter 2nd Local Synthesizer Surface Acoustic Wave Filter Voltage-Controlled Oscillator （VCO） PLL Module Antenna Local Filter Chip Dielectric Antenna Antenna Communal Area Chip Multilayer LC Filter Chip Multilayer Antenna High Frequency Top Filter PLL module Dielectric Filter VCO Surface Acoustic Wave Filter Divider First Local Synthesizer RF Diode Switch Divider Chip Multilayer 3ｄｂ Voltage-Controlled Oscillator RFSub.Mod. Ｂｌｕｅｔｏｏｔｈ Module （VCO） Connector Hybrid Coupler PLL Module Micromini Coaxial Connector Base-station DC-DC Converter Transmitter Circuit Interstage Filter Isolator Coupler Power Amp Dielectric Filter isolator Chip Multilayer GaAs MMIC Hybrid Coupler Chip Multilayer LC Filter Surface Acoustic Wave Filter 6 MajorMajor ProductsProducts forfor PersonalPersonal ComputerComputer Power Supply Circuit Parts LCD Parts Power Supply Circuit Parts Semi/High Voltage Chip Multilayer Ceramic Capacitor DC/DC converter High Volume Chip Multilayer Ceramic Capacitor Chip Ferrite Bead Semi/High Voltage Chip Multilayer Heat Protection Chip PTC Thermistor Ceramic Capacitor Piezoelectric Transformer Rechargeable Battery Temperature Control Chip NTC Thermistor CPU/Memory Control Parts DC/DC Converter Chip Ferrite Bead Switching Power Supplies Chip Multilayer Delay Line Chip EMI Suppression Filters Chip Ceramic Oscillator Chip Coil Interface Parts Input Device Chip Ferrite Bead Piezoelectric Vibrating Gyroscope Ｂｌｕｅｔｏｏｔｈ Module Piezoelectric Sounderﾞ Semi/High Voltage Chip Multilayer ＰＨＳ Data Card Ceramic Capacitor HDD/DVD/CD-ROM Parts USB Circuit Protective PTC Thermistor Sensitive Chip Shock Sensor Modem/Module Chip Ceramic Oscillator 7 MajorMajor ProductsProducts forfor CarCar ElectronicsElectronics 76GＨｚ Band Radar Module PLL Module for ETC Engine Controller ITS (Information of Traffic System) Knocking Sensor Chip Dielectric Antenna NTC Thermistor Dielectric Filter ECU Parts Chip Multilayer LC Filter In-Car Chip Multilayer Ceramic Capacitor Ceramic Filter Chip Ceramic Oscillator Voltage Controlled Oscillator（VCO）/PLL Module Navigation System Back Sonar High Frequency Wave Coaxial Connector Airborne Ultra Sensor Door Mirror/Door Lock Dielectric Filter Piezoelectric Shock Gyro PTC Thermistor NTC Thermistor Burglar Alarm High Accuracy Safety Parts Airborne Ultrasound Sensor Keyless Entry Angular Rate Air Bag Sensor Shock Sensor Sensor for Car Surface Acoustic Wave Oscillator Piezoelectric Buzzer Navigation Surface Acoustic Wave Filter Chip Multilayer LC Filter Antenna Coil 8 Contribution to Miniaturization and Low Profile Electronic Devices 9 ConversionConversion ofof MobileMobile PhonePhone Reference：DoCoMo ■Automobile Phone ■Shoulder Phone ■Mobile Phone ■Digital ｹｰﾀｲTV電話 おサイフ携帯 1979 1985 1987 1993 1999 2001 2004 <Multilayer Ceramic Capacitor> - -MLCC 3216 2012 1608 1005 0603 0402 10 VerticalVertical IntegrationIntegration ofof TechnologiesTechnologies MATERIALS TECHNOLOGY PROCESSING TECHNOLOGY MODULES DESIGN ANALYSIS TECHNO SOFTWARE COMPONENTS AND LOGY AND ELEMENTS EVALUATION MATERIALS PRODUCTION TECHNOLOGY R&D Cost to Sales 7% New Product Sales 30% - - >40% 11 R&D Investments/ Ratio of R&D Investments vs. Net Sales (Million of Yen) （％） 35,000 9 8 30,000 7 25,000 6 R&D Investments 20,000 5 Ratio vs. Net Sales 15,000 4 3 10,000 2 5,000 1 0 0 '01'02'03'04'05 (Fiscal Year) 12 GlobalGlobal MarketMarket ShareShare Multi layer Ceramic EMI Clearing Filter Chip Capacitor 35% 35% Ceramic Filter／Oscillator SAWF ～ 65% 70% 25%～30% 13 ProductsProducts GroupGroup Bluetooth® Module／Wi-Fi Switching Power Supplies for Flat Panel Displays Terrestrial Digital Tuners for Mobile Phones Functional Modules Gyro Sensors Ceramic Resonators/Ceramic Filters SAW Filters Application Specific Components Capacitors Electronics Industry’s Infrastructure EMI Filters 14 NetNet SalesSales 2006 Annual Consolidated basis ： 566,805 2006 Annual Parent Co. basis ： 490,642 2007 Annual Consolidated basis ： 615,000(expect) (Million of Yen) 2007 Annual Parent Co. basis ： 525,000(expect) 2015 Annual Consolidated basis ： 1,000,000 (target) 1,100,000 1,000,000 Parent Co. basis 900,000 Consolidated basis 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 2001 2002 2003 2004 2005 2006 2007 2015 (Fiscal Year) expect target 15 OverseasOverseas ProductionProduction LessLess thanthan 20%20% ofof productionproduction outout ofof JapanJapan 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% 96F 97F 98F 99F 00F 01F 02F 03F 04F 05F 96F 97F 98F 99F 00F 01F 02F 03F 04F 05F Overseas海外生産 Production国内生産Domestic Production 16 Change of Business Environment 17 ChangeChange ofof MarketMarket andand CustomerCustomer MarketMarket ChangeChange：： <1><1> ChangeChange ofof LeaderLeader <2><2> DiversificationDiversification andand ComplexityComplexity ofof BusinessBusiness ~ ’90 : Japanese manufacturer was the world leader. ’90~’00 : World leader shifted to non-Japanese. ’00~: Diversification and complexity of business model. （EMS、ODM／OEM、Design House、IC、 etc.） 18 MainMain ElectronicElectronic DeviceDevice WorldWorld ShareShare Mobile Phone PCPC DELL Other Nokia 17% Siemens 18% 33% 5% Other Hewlett Packard LG 53% 6% 14% Sony Ericcson Motorola 7% Samsung 19% Lenovoﾞ 12% 7% Acer Fujitsu/ 5% Fujitsu Siemens 4% ※Mobile Phone→2005 third quarter world market share VS end-user sales PC→2005 World market shipment volume by vendor（provisional） （Source）Gartner Data Quest 19 Relation Between“Seed Planting”and“Harvesting” Seed Planting Seed Planting Sales Harvesting Marketing Sales Marketing Sales Engineering Support And Development 20 Future Structure Global Sales and Marketing Multi-National Production - > More in overseas , More advanced products Domestic R&D Activity - > More in overseas - > Basic research , not only in Japan - > Support local customers - > Use more engineering resource in overseas - > Some collaboration with start-up companies - > M&A 21.