Presentation Q&A

Q: What is the most important reason why Murata has corrected its performance forecasts downward?

A: The biggest reason is that the technical difficulty of the new product MetroCircTM causes the yield rate to fall short of the forecast level, resulting in an increase in production costs. At the same time, the additional capital investment that has been made is expected to raise depreciation and amortization and investment-related expenses. We also anticipate the negative impact of a reduction in SAW filter sales due to the delay in the recovery of Chinese smartphones compared with our initial estimate, as well as the loss expected for the battery business following the completion of the acquisition process.

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A: The technical challenge was the main reason. We developed many measures (including ones for streamlining) for MetroCircTM such as introducing a new cost reduction approach. Despite these efforts, however, we couldn't launch the production as planned.

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A: In Q2, the utilization of entire company 105% based on 20 operating days. In Q3 we expect to achieve 95% of that capacity. Capacitors used 100% based on 27 operating days in Q2. In Q3, we expect to achieve 100% of that capacity.

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A: In Q2, our production reached 366 billion yen. We expect to achieve the same output as net sales in Q3 and 8 billion yen higher than net sales in Q4.

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A: It includes the purchase of land in the Yokohama Minato Mirai 21 district for a development site, additional investment in increasing MetroCircTM production, the acquisition of the Nomi Plant in Ishikawa Pref., and investment in the battery business following the completion of the acquisition process.

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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.