Murata‘s Latest Performance: MLCC Demand Soars!

01 Revenue Growth Amid Profit Decline: Acquisition of Resonant Leads to ¥43.8 Billion Goodwill Impairment

While demand for high-frequency modules and resin multilayer substrates for smartphones decreased, demand for capacitors for servers increased, leading to a growth in Murata's third-quarter sales volume.

However, due to a goodwill impairment loss recognized in the surface acoustic wave (SAW) filter-related business, consolidated operating profit fell sharply by 50.2% to ¥37.9 billion, and consolidated net profit dropped significantly by 64.8% to ¥25.0 billion.

Fiscal Year 2025 Third Quarter Results Overview Source: Murata Manufacturing Co., Ltd.

Murata pointed out that the company acquired the U.S. RF filter manufacturer Resonant in March 2022 for approximately ¥35 billion. This acquisition resulted in a ¥43.8 billion goodwill impairment loss being recognized for Resonant in this quarter. Furthermore, the company assessed that the recoverable amount of the related fixed assets remains above their carrying value and therefore did not proceed with an impairment charge on those assets.

The objective of the acquisition was to obtain technology supporting frequencies above 3 GHz for new standards such as Wi-Fi 7 and FR3. However, the trend toward higher frequencies in the market has since slowed. Additionally, the competitive landscape has intensified with the rise of Chinese manufacturers, leading to a significant deterioration in profitability.

       Impairment process Source: Murata Manufacturing Co., Ltd.

Given this situation, President Norio Nakajima stated at the financial results briefing that the company's future business policy will be to "prioritize gaining market share in high-end smartphones," which is expected to have a significant impact on the Surface Acoustic Wave (SAW) filter business.

Furthermore, regarding the growing demand for core products such as Multilayer Ceramic Capacitors (MLCC) and other electronic components in the AI server sector, Mr. Nakajima commented, "Whether we can meet the demand in 2026 will be a major challenge. The company is not currently discussing price increases, but believes careful consideration should be given based on market conditions."

02 Order Surge Prompts Upgrade to Full-Year Sales Forecast

Third-quarter orders amounted to ¥500.7 billion, showing sequential growth and a significant year-on-year increase of 11.5%. Among these, capacitor orders surged by 29.4% to ¥268.1 billion. The BB ratio (the ratio of orders to sales) stood at 1.07, indicating that order volume slightly exceeded sales, and it has remained above "1" for five consecutive quarters.

Trends in sales revenue / order amount / unfulfilled order amount. Source: Murata Manufacturing Co., Ltd.

Murata's Components Business Unit (including capacitors and inductors/EMI filters) saw revenue grow by 11.7% year-on-year to ¥295.5 billion. Within this unit, revenue from the core product category of capacitors (primarily MLCCs) increased by 12.2% to ¥239.1 billion, while revenue from inductors/EMI filters rose by 9.5% to ¥56.4 billion.

In contrast, Murata's Modules & Devices Business Unit (encompassing high-frequency/communication modules, energy/power components, and functional components) experienced a 6.6% decline in revenue to ¥168.2 billion. A breakdown shows revenue from high-frequency/communication modules (including high-frequency modules, SAW filters, connectors, and the resin multilayer substrate "MetroCirc") dropped sharply by 15.4% to ¥102.2 billion. However, revenue from energy/power components (including lithium-ion batteries and power supply modules) grew by 12.4% to ¥38.9 billion, and revenue from functional components (including sensors) increased by 10.3% to ¥27.1 billion.

When segmented by application market, the "Communications" sector declined by 4.5% year-on-year, while all other sectors posted growth. Notably, the "Computers" sector delivered a particularly strong performance, surging by 26.5% year-on-year.

         Sales revenue by business unit. Source: Murata Manufacturing Co., Ltd.

   Sales revenue by application category. Source: Murata Manufacturing Co., Ltd.

The full-year profit forecast for fiscal year 2025 has been revised, with sales upgraded and operating profit downgraded. Due to the continued depreciation of the yen, coupled with expanded demand driven by increased adoption in AI servers and peripheral equipment as well as higher smartphone production, the sales forecast has been raised by ¥60 billion to ¥1.8 trillion. On the other hand, significantly impacted by impairment losses, the operating profit forecast has been lowered by ¥10 billion to ¥270 billion.

 Full-year forecast for fiscal 2025 (Data source: Murata Manufacturing Co., Ltd.).