The passives components market has revitalized itself with new products and supply chain services since being devastated by the industry's worst downturn seven years ago, What's next for 2007? John Denslinger, Murata's executive vice president, talked in an interview about how 2006 wrapped up and where he thinks 2007 is heading.
Question: What surprised you in 2006 with regard to the passives industry?
Denslinger: The demand for passives not only remained constant, but steadily increased throughout the year exceeding even the most optimistic forecasts. Sales of digital products—cell phones, MP3s, gaming systems, flat panel displays—contributed greatly to our sales expansion. Significant strength in all markets enabled Murata to expand business globally to a point of full operating capacity.
Question: What are you looking to in 2007?
Denslinger: We fully expect to see demand trending positive well into 2007. Consumers will continue driving the market, specifically demand for advanced automotive electronics, innovative entertainment and smart appliances for the home, as well as a myriad of handheld communication devices with enriched features. Increases of unit sales and passive content/unit will again drive the demand for our miniaturized discrete components.
Question: Are there any dynamics that you think will have major impact next year?
Denslinger: Look for more module expansion - particularly in the wireless arena. We see tremendous opportunities for Murata's miniaturization technology enabling seamless wireless connectivity. We intend to cover all applicable frequencies and standard communication protocols.
Question: What is Murata looking to accomplish in 2007?
Denslinger: Simply stated, we would like to achieve "double-digit" growth. In addition to our current product portfolio, look for us to introduce more innovative products from our own development initiatives. And now where appropriate, acquisitions may accelerate that expansion.
Question: What were some of the company's biggest successes in 2006?
Denslinger: The acquisition of SyChip represented a dramatic change to our business model. April's announcement was the first time that we looked external or additional capabilities, technologies and software expertise. Secondly, it could be argued that timely investment in new production capacity allowed us to continuously supply our customers as their demand exploded.