Murata Manufacturing - Company History

Akira Murata was born to a Kyoto maker of ceramic insulators and left commercial school early after tuberculosis. His father was a steady craftsman content to subcontract; Akira saw the future not in insulators but in “special ceramics” — firing pottery into electronic components. With no training in electricity, in October 1944 he rented a former dye works in central Kyoto and founded Murata Manufacturing as a one-man business: a 150-square-metre workshop with a hand-built gas kiln, one male craftsman and about ten women. Kyoto’s old Kiyomizu-ware pottery trade gave him a base of firing know-how to repurpose for electronics.

His single customer — Mitsubishi Electric’s Itami works — asked not for the high-frequency insulators he had first pursued but for titanium-oxide ceramic capacitors for communications gear. Knowing no electronics, he reached a working sample after three months of trial and error, opening a door a big company had first closed on him for his lack of schooling. “Because I never liked competing with others, I came to stay one step ahead,” he later said — the seed of a lasting rule: choose fields no one else will enter, and win on quality, not price. “This company does not do cheap-price business,” he would still insist decades on.

Japan’s 1945 surrender wiped out military demand, but when the occupation forced radios onto the superheterodyne standard, civilian demand for his capacitors surged on the postwar radio boom and Murata swung from military to consumer. He incorporated in 1950 and — burned by the quality scatter of imported pre-mixed materials — built a vertically integrated model that ran everything in-house, from compounding the raw powder through forming, firing and finishing. The ceramic filter he completed in 1963 would grow to hold 80% of the world market; he listed in Osaka that year, having just moved the head office to Nagaokakyo and begun seeding the network of independently accounted affiliate factories Murata still runs on. In under twenty years, an insulator-maker’s son with no electrical training had turned a back-street workshop into the core of Japan’s ceramic-components industry.

From 1965 Murata pushed abroad — a US sales arm that year, Singapore in 1972, its first European company in Germany in 1978 — and in 1980 it bought two-thirds of Erie Technological Products, a Canadian multinational with plants across North America, West Germany and Mexico and sales arms in France and Italy, contracting to absorb it fully within five years. In one stroke Murata gained a North American and European base of factories and customers. Where most component makers were chasing cheap labour offshore to escape the strong yen, Murata did the reverse: it took over a firm whose industrial and military lines barely overlapped its own, funding the deal with money raised on high share prices during the mid-1970s convertible-bond boom. “From now on we have to take on the world,” Akira Murata said of the move.

The multipolar network it had built underwrote a contrarian bet. In 1979, after a strong yen had cost it about $3.9M (¥1bn) in exchange losses and cut its operating margin from 20.8% to 6.7%, Murata unified 96% of its export contracts into yen — pulling the currency initiative onto the seller’s side just as rivals pushed production offshore to dilute it. What made it stick was market power: an 85% share of the world ceramic-filter market and 50–85% of microwave filters and piezoelectric ceramics. With customers holding no substitute to switch to, the yen terms held. By November 1994 a securities house reckoned Murata would still post higher profit “even at ¥40 to the dollar,” and the year to March 1995 set a profit record. President Yasutaka Murata later said the aim was less to dodge one bout of yen strength than to drive cost discipline “all the way out to the front line of sales.”

The other project of these years was climbing from single parts to modules. In 1990 Murata set up a Functional Device division to fuse several components into higher-value products, incubating the new business inside the company by bundling it with steady existing lines rather than spinning it out — an internal-incubation style that became its template for hunting the “next pillar.” Yasutaka Murata, president from 1991, dismantled the founder’s technology headquarters in 1993, split long-range development from production support, and built a gallium-arsenide and thin-film plant in Yasu to bring the modules’ core devices in-house — protecting, he argued, the single-part strength on which the whole module business rested.

Tsuneo Murata, the founder’s son, took the presidency in 2007 — just before the 2008 Lehman shock swung Murata’s MLCC-driven result to an operating loss in the year to March 2009, as demand evaporated. But sales snapped back on smartphone demand: each new handset packed in more multilayer ceramic capacitors, and volume growth more than absorbed falling unit prices, carrying sales past $8.3B (¥1tn) by the year to March 2015. It came with a warning, too — Korean rivals climbed to number two in MLCC share, partly on the strength of Japanese engineers, Murata alumni among them.

Riding that tailwind, Murata went shopping for a second pillar beyond MLCC. It bought Finland’s VTI Technologies for about $250.7M (¥20bn) in 2012 to enter MEMS inertial sensors, took over Renesas’s power-amplifier business the same year, absorbed America’s Peregrine Semiconductor in 2014 for RF-SOI technology, and added France’s Murata Integrated Passive Solutions in 2016 — a decade of buying outside technology rather than only incubating materials in-house. The boldest step came in 2017: Murata took over Sony’s lithium-ion battery business, stepping well outside its integrated-ceramics comfort zone into a field it would struggle for years to make pay.

In 2020 Norio Nakajima became president — the first from outside the founding family, ending three generations of Murata leadership. He inherited both a record-setting components business and a growing pile of acquisitions whose payback was still uncertain, and a revenue line that swung ever more sharply with the smartphone cycle.

Under Nakajima the MLCC business swung hard with the smartphone cycle — record highs in the year to March 2022, a sharp reversal the next year, and a weak first year on IFRS to March 2024, when Nakajima owned his medium-term plan’s miss on its economic-value target. The split was stark: AI-server MLCC and automotive ADAS inductors grew, while the smartphone-tier device businesses — high-frequency modules, SAW filters, batteries — sagged. Nakajima framed it as a roughly fifteen-year wave in electronics, and set out to hold on until the next crest.

Then the acquired “second pillars” came due for reckoning. In the year to March 2025 Murata wrote off the entire equipment value of the 2012 VTI MEMS-sensor business — an impairment of $69.5M (¥10bn) — after autonomous-driving Level 3, on which those sensors were bet, spread far slower than assumed, and it booked a full year of battery restructuring charges. In February 2026 it impaired the whole $276.9M (¥44bn) of goodwill from its 2022 Resonant acquisition. One after another, the outside-technology bets of the 2010s were being re-priced.

The reckoning reframed capital policy. A debt-free company that had always ploughed its earnings back into capex and acquisitions announced its largest-ever share buyback — up to $668.2M (¥100bn) — in 2025 and raised its dividend. For a Murata that had returned capital sparingly, handing this much back to shareholders was a break: Nakajima, the first president from outside the founding family, was widening a reinvest-everything policy to include distribution, funded by the excess profits swelling from AI-server demand. The dependence on the MLCC cycle remained — but the way Murata used the cash it threw off was changing.