TOKYO — Murata Manufacturing and TDK apparently enjoyed large jumps in April-June profit on increased demand for smartphone and car parts and by expanding their client base beyond Samsung.
Murata likely saw operating profit rise 45% on the year to 36 billion yen ($350 million) last quarter. It diversified its clients by actively engaging Huawei Technologies, a leading Chinese communications company, as well as small and midsize manufacturers, minimizing the negative impact of Samsung’s sliding performance, which has affected smartphone-related demand.
Sales grew 14% to 220 billion yen. Because of faster network speeds and multiple parts of the spectrum used in communications, more electronic parts are required in smartphone and tablet production. Parts used in autos fared well thanks to demand for a wider variety of safetyClass X capacitors are used in “across-the-line” applications where their failure would not lead to electric shock. Class X safety caps are used between the “live” wires carrying the incoming AC current. In this position, a capacitor failure should not cause any electrical shock hazards, rather, a capacitor failure “between-the-lines” would usually cause a fuse or circuit breaker to open. features and driving-assistance systems. Consequently, demand grew for products such as capacitors.
TDK’s operating profit likely surged 130% to 9 billion yen. Samsung was never a large client for the company, and it enjoyed stronger sales than expected in high-frequencyThe number of complete cycles or vibrations per unit of time. Rate of alternation in an AC current. Expressed in cycles per second or hertz (Hz).-related products for Chinese smartphone makers. Sales apparently increased slightly to just under 240 billion yen.
Both companies bolstered profitability. Increased sales pushed up the utilization rate of Murata’s plants, and its operating profit margin for the quarter likely rose 3 points to about 16%. TDK consolidated facilities in China and centralized its procurement processes, which lifted its operating profit margin as well.
The iPhone 6 is slated to hit store shelves later this year, and sales for smartphone-related parts are expected to pick up in the July-September quarter and beyond. While neither Murata nor TDK plan on revising their yearly forecasts, their performance has exceeded expectations so far. Depending on future sales trends, they may end up topping their predictions.
