Presentation Q&A

Q: You plan to maintain high levels of capital investments this fiscal year, too. What are your plans to increase production capacity?

A: As far as we are informed, there is not only increasing demand for MLCCs, but we also see steadily growing demand for SAW filters and inductors due to the progress of multiband smartphones. These trends make us expect that demand in quantities will continue to rise through 2017F. We will make aggressive investments to ensure that we can get ahead by building higher production capacity than the competition to be ready for the anticipated rise in demand.

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A: In MLCCs, we followed our plans in 2015F by increasing their capacity by 10%. In 2016F, we plan on another 10% increase in capacity. In SAW filters, too, we followed our plans in 2015F by achieving 30% growth in capacity. In 2016F, we expect to achieve a 20% increase.

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A: We achieved 265.0 billion yen in production in Q4 2015F ($1=115 yen). We will increase our inventories by 10.0 billion yen in Q1 2016F, and expect to achieve the same production as net sales in Q2 2016F ($1=110 yen).

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A: The ongoing trend in carrier aggregation is expected to generate demand for SAW filters offering high value added, which will have a positive impact on component demand in terms of amount.

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A: The spread of carrier aggregation will clearly depend on the spread of compatible IC chips. Such IC chips will gradually increase in number starting as early as later this year.

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A: We have already been able to identify the reasons for the reduction in our share of the communication module market. Going forward, we will make our priority clearer, for example by taking a “selection and concentration” approach to module development, to recover our share.

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A: As we see it, the market environment remains much the same as what it was at the time of the December Conference, although the lower share of communication modules slightly reduces net sales.

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This Q&A contains forward-looking statements concerning Murata Manufacturing Co., Ltd. and its group companies' projections, plans, policies, strategies, schedules, and decisions. These forward-looking statements are not historical facts; rather, they represent the assumptions of the Murata Group (the "Group") based on information currently available and certain assumptions we deem as reasonable. Actual results may differ materially from expectations due to various risks and uncertainties. Readers are therefore requested not to rely on these forward-looking statements as the sole basis for evaluating the Group. The Company has no obligation to revise any of the forward-looking statements as a result of new information, future events or otherwise.

Risks and uncertainties that may affect actual results include, but are not limited to, the following:

1.economic conditions of the Company's business environment, and trends, supply-demand balance, and price fluctuations in the markets for electronic devices and components
2.price fluctuations and insufficient supply of raw materials
3.exchange rate fluctuations
4.the Group's ability to provide a stable supply of new products that are compatible with the rapid technical innovation of the electronic components market and to continue to design and develop products and services that satisfy customers
5.changes in the market value of the Group's financial assets
6.drastic legal, political, and social changes in the Group's business environment; and
7.other uncertainties and contingencies.

The Company undertakes no obligation to publicly update any forward-looking statements included in this Q&A.