The Change in ElectronicsCross-boarder trade and investment in the Asia-Pacific region

October 26 , 2007 at Kyoto University (Katsura)

Hiroshi IWATSUBOHiroshi IWATSUBOGM , Corporate PlanningGM , Corporate Planning

2

Head Office:Head Office: KyotoEstablishment October 1994Establishment October 1994

Incorporation Incorporation December 23December 23，，19501950

Sales Amount: Sales Amount: 69,376 M JPY ((as of March 31, 2007)

*Overseas Sales Amount 73*Overseas Sales Amount 73％％

Affiliated Companies: Affiliated Companies: 56 ((as of March 31, 2007)

(23 in Japan and 33 overseas)

Employee: Employee: 27,45327,453 ((as of March 31, 2007)

(Japan 18,461(Japan 18,461、、Overseas 8,992)Overseas 8,992)

Corporate Profile

3

Network in JapanNetwork in Japan

Tokyo Branch International Sales Department, Tokyo Branch

Head office

Branch / Plant ( MMC )

Sales Office

Subsidiary

Yasu Plant

Yokaichi Plant

Okayama Murata Manufacturing Co., Ltd.

Izumo Murata Manufacturing Co., Ltd.

Iwami Murata Manufacturing Co., Ltd.

Azumi Murata Manufacturing Co., Ltd.

Tome Murata Manufacturing Co., Ltd.Fukui Murata

Manufacturing Co., Ltd.

Sabae Murata Manufacturing Co., Ltd.

Kanazu Murata Manufacturing Co., Ltd.

Komatsu Murata Manufacturing Co., Ltd.

Kanazawa Murata Manufacturing Co., Ltd.Toyama Murata Manufacturing Co., Ltd.

Hakui Murata Manufacturing Co., Ltd.

Wakura Murata Manufacturing Co., Ltd.

Yokohama Technical Center

Himi Murata Manufacturing Co., Ltd.

Ogaki Murata Manufacturing Co., Ltd

Murata Electronics Co., Ltd.

Sales Office of Subsidiary

Nagaoka Plant

Head office

Research Center for Next Generation Technology

Research Center

Asuwa Electronics Industries, Ltd.

Anamizu Electronics Industries, Ltd.

4

Global NetworkGlobal Network

MurataMurata Electronique S.A.

MuMurata Electronics North America, Inc.

Murata World Comercial Ltda.

MuraMurata Elettronica S.p.A

Murata Eletronica Do Brasil Ltda.

Murata ElectronicsMurata Electronics (UK) LtdMMurata Electrronics (Netherlands) B.V.Murata Europe Management B.V.

Murata Elektronik GmbH

Murata Electronics (Thaila(Thailand),Ltd.Ltd.

Murata Electronics (Malaysia) Sdn.Bhd.

Murata Trading (Malaysia) Sdn.Bhd.

Beijing Muratarata EElectronics Co., Ltdics Co., Ltd

Korea Murata Electronics Company,Murata Electronics Company, LimitedLimited

Murata Manufacturing Co., Ltd.

WuWuxi Murata Electronics Co., Ltd.

Murata Electronics North America,Inc.Murata Electronics North America,Inc.Taiwan BranchTaiwan Branch

Taiwan Murata Electronics Co., Ltd..Taiwan Murata Electronics Co., Ltd..

Hong Kong Murata Electronics Co., Ltd.

Murata Electronics Singapore (Pte.) Ltd..

Murata Amazonia Industria E Comercio Ltda.

Murata Electronics Philippines Inc.

Thai Murata Electronics TradiTrading, Ltd.Ltd.

Suzhou Murata Electronics Co., Ltd.

Murata Co., Ltd.

Murata Electronics Switzerland AG

Murata Electronics Trading Mexico, S. A. de C. V.

Murata Electroectronics Trading (Tianjin) Co., Ltds Trading (Tianjin) Co., Ltd

Murata Electronics Tradingg (Shanghai) Co., Ltd

Murata Amazonia Industria E Comercio Ltda.

Murata Electronics Tradingg (Shenzhen) Co., Ltd

Murata Europe Management B.V. Copenhagen OfficeMMurata Electrronics (Netherlands) B.V. Stockholm Office

MMurata Electrronics (Netherlands) B.V. Helsinki Office

MMurata Electrronics (Netherlands) B.V.Barcelona Office

Murata Elektronik GmbH Budapest Office

Head Office

Sales Office

Sales Office and Production Plant

Production Plant

SyChipSyChip, Inc.

Technology Developing Plant

SyChip ShanghaiSyChip Shanghai, Inc.

Murata (China) Investment Co., Ltd

5

Production and Sales Offices in Greater China

Murata Electronics Trading (Shenzhen) Co., Ltd.

Murata Company Ltd (Hong Kong）

Beijing Murata Electronics Co., Ltd.

Murata Electronics Trading (Tianjin) Co., Ltd.

Murata Electronics Trading (Shanghai) Co., Ltd.Wuxi Murata Electronics Co., Ltd.

Hong Kong Murata Electronics Co., Ltd

Murata (China) Investment Co., Ltd.

Taiwan Murata electronics Co., Ltd.Shenzhen Murata Technology Co., Ltd.

Regional Head Office

Sales Office

Sales Office and Production Plant

Production Plant

Murata Electronics Trading (Shenzhen) Co., Ltd. Xiamen Office

Murata Electronics Trading (Tianjin) Co., Ltd. Dalian Office

Murata Electronics Trading (Tianjin) Co., Ltd. Beijing Office

Murata Electronics Trading (Tianjin) Co., Ltd. Qingdao Office

Murata Electronics Trading (Shanghai) Co., Ltd. Suzhou Office Murata Electronics Trading (Shanghai) Co., Ltd. Hangzhou Office

Taiwan Murata electronics Co., Ltd. Taipei Office

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RFSub.Mod.

PLL module

SAW FILTER

Base-station DC-DC Converter

Major Products of Mobile CommunicationMajor Products of Mobile Communication

First Intermediate First Intermediate Frequency FilterFrequency Filter

Ceramic Filter

First Intermediate First Intermediate Frequency FilterFrequency Filter

2nd Local Synthesizer2nd Local Synthesizer

First Local SynthesizerFirst Local Synthesizer

Transmitter Circuit Interstage FilterTransmitter Circuit Interstage Filter

Local FilterLocal Filter

DividerDivider

Power AmpPower AmpCouplerCouplerIsolatorIsolator

ConnectorConnector

Antenna Communal AreaAntenna Communal AreaHigh Frequency Top FilterHigh Frequency Top Filter

Low Noise AmpLow Noise Amp Receiving Circuit Interstage FilterReceiving Circuit Interstage Filter

AntennaAntenna

Voltage-Controlled Oscillator （VCO）

PLL Module

Surface Acoustic Wave Filter

Voltage-Controlled Oscillator （VCO） PLL Module

Chip Multilayer 3ｄｂHybrid Coupler

Dielectric FilterChip Multilayer LC FilterSurface Acoustic Wave Filter

GaAs MMICChip Multilayer Hybrid Coupler

isolator

Chip Multilayer LC Filter

GaAs MMICDielectric Filter

Chip Multilayer LC Filter

Surface Acoustic Wave Filter

Dielectric FilterSurface Acoustic Wave FilterRF Diode Switch

Micromini Coaxial Connector

Chip Dielectric AntennaChip Multilayer Antenna

VCO

Chip Dielectric Antenna

Ｂｌｕｅｔｏｏｔｈ Module

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ＰＨＳ Data Card

Major Products for Personal ComputerMajor Products for Personal Computer

Power Supply Circuit PartsPower Supply Circuit PartsSemi/High Voltage Chip Multilayer Ceramic Capacitor

High Volume Chip Multilayer Ceramic Capacitor

Heat Protection Chip PTC Thermistor

Rechargeable Battery Temperature ControlChip NTC Thermistor

DC/DC Converter

Chip EMI Suppression FiltersChip Coil

Switching Power Supplies

Input DeviceInput Device

Piezoelectric Vibrating Gyroscope

HDD/DVD/CDHDD/DVD/CD--ROM PartsROM PartsSensitive Chip Shock Sensor

Chip Ceramic Oscillator

LCD PartsLCD Parts

CPU/Memory Control PartsCPU/Memory Control Parts

Interface PartsInterface Parts

DC/DC converter

Piezoelectric Transformer

Chip Ferrite BeadSemi/High Voltage Chip Multilayer Ceramic Capacitor

Chip Ferrite BeadChip Multilayer Delay LineChip Ceramic Oscillator

Chip Ferrite Bead

Piezoelectric Sounderﾞ

USB Circuit Protective PTC ThermistorModem/Module

Semi/High Voltage Chip Multilayer Ceramic Capacitor

Ｂｌｕｅｔｏｏｔｈ Module

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Major Products for Car ElectronicsMajor Products for Car Electronics

Knocking Sensor

ITS (Information of Traffic System)ITS (Information of Traffic System)

Navigation SystemNavigation System

Keyless EntryKeyless Entry

Engine ControllerEngine Controller

ECU PartsECU Parts

Back SonarBack Sonar

Door Mirror/Door LockDoor Mirror/Door Lock

Burglar AlarmBurglar Alarm

NTC Thermistor

In-Car Chip Multilayer Ceramic CapacitorChip Ceramic Oscillator

Airborne Ultra Sensor

PTC Thermistor

Airborne Ultrasound Sensor

Piezoelectric Buzzer

Chip Dielectric Antenna

Dielectric Filter

Chip Multilayer LC Filter

Ceramic FilterVoltage Controlled Oscillator（VCO）/PLL Module

High Frequency Wave Coaxial Connector

Dielectric Filter

Piezoelectric Shock Gyro

NTC Thermistor

Surface Acoustic Wave OscillatorSurface Acoustic Wave Filter

Chip Multilayer LC Filter

Antenna Coil

76GＨｚ Band Radar Module

Air Bag Sensor Shock SensorSafety Parts High Accuracy

Angular Rate Sensor for Car Navigation

PLL Module for ETC

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Contribution to Miniaturizationand

Low Profile Electronic Devices

10

Conversion of Mobile PhoneConversion of Mobile PhoneReference：DoCoMo

1979 1985 1987 1993 1999

ｹｰﾀｲTV電話

2001

おサイフ携帯

2004

3216 2012 1608 1005 0603 0402

<<Multilayer Ceramic Capacitor> - -MLCC

■Digital■Mobile Phone■Automobile Phone ■Shoulder Phone

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Vertical Integration of TechnologiesVertical Integration of Technologies

R&D Cost to Sales 7%New Product Sales 30% - - >40%

MATERIALS TECHNOLOGY

PROCESSING TECHNOLOGY

SOFTWAREDESIGN TECHNOLOGY

ANALYSIS AND EVALUATION

PRODUCTION TECHNOLOGY

MODULES

COMPONENTS AND ELEMENTS

MATERIALS

12

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

'01 '02 '03 '04 '05

0

1

2

3

4

5

6

7

8

9

R&D InvestmentsRatio vs. Net Sales

（％）

(Fiscal Year)

(Million of Yen)

R&D Investments/R&D Investments/Ratio of R&D Investments vs. Net SalesRatio of R&D Investments vs. Net Sales

13

Global Market ShareGlobal Market ShareMulti layer Ceramic

Chip Capacitor35%

Ceramic Filter／Oscillator65%～70%

SAWF

25%～30%

EMI Clearing Filter

35%

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Products GroupProducts Group

Switching Power Supplies for Flat Panel DisplaysTerrestrial Digital Tuners for Mobile Phones

Gyro Sensors

Ceramic Resonators/Ceramic Filters

Capacitors

SAW Filters

EMI Filters

Functional Modules

Application Specific Components

Electronics Industry’s Infrastructure

Bluetooth® Module／Wi-Fi

15

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1,000,0001,100,000

2001 2002 2003 2004 2005 2006 2007expect

2015target

Parent Co. basis

Consolidated basis

(Fiscal Year)

(Million of Yen)

Net SalesNet Sales2006 Annual Consolidated basis ： 566,8052006 Annual Parent Co. basis ： 490,6422007 Annual Consolidated basis ： 615,000(expect)2007 Annual Parent Co. basis ： 525,000(expect)2015 Annual Consolidated basis ： 1,000,000 (target)

16

Overseas ProductionOverseas Production

0%

20%

40%

60%

80%

100%

96F 97F 98F 99F 00F 01F 02F 03F 04F 05F

海外生産 国内生産

Less than 20% of production out of JapanLess than 20% of production out of Japan

0%

20%

40%

60%

80%

100%

96F 97F 98F 99F 00F 01F 02F 03F 04F 05F

Overseas Production Domestic Production

17

Change of Business Environment

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Market ChangeMarket Change：：<1> Change of Leader<1> Change of Leader<2> Diversification and Complexity of Business<2> Diversification and Complexity of Business

~ ’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.）

Change of Market and CustomerChange of Market and Customer

19

Main Electronic Device World ShareMain Electronic Device World Share

PCPCMobile Phone

※Mobile Phone→2005 third quarter world market share VS end-user salesPC→2005 World market shipment volume by vendor（provisional）

（Source）Gartner Data Quest

Fujitsu/Fujitsu Siemens

4%

Other53%

Acer5%

Lenovoﾞ

Hewlett Packard

DELL17%

14%

7%

LG6%

Siemens5%

Other18%

Sony Ericcson7% SamsungMotorola

Nokia33%

12%19%

20

Harvesting

Seed PlantingSeed Planting

Relation BetweenRelation Between““Seed PlantingSeed Planting””andand““HarvestingHarvesting””

SalesMarketing

SalesMarketing

Sales

Engineering SupportAndDevelopment

21

Future Structure Global Sales and MarketingMulti-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