Highlights in FY2007 (ended Mar. 2008)

Financial Overview

(in million JPY)	FY2007	FY2006	Rate of change	Main factor
Overall
Sales	631,655	566,805	11.4%	In order to meet growing demand, the Company carried out projects to increase the production capacity of its major product lines. It also improved its profit structure and enhanced its operating base by promoting cost reduction activities such as productivity improvement  as well as development and market delivery of more high-value added products to cover the decrease in product prices.
Operating income	115,752	113,365	2.1%
Net income	77,413	71,309	8.6%

Sales by product

(in million JPY)	FY2007		FY2006	Rate of change	Product items
	Sales	%	Sales
Capacitors	249,388	39.6%	215,255	15.9%	-Chip multilayer type ceramic capacitors -Disc type ceramic capacitors -Trimmer capacitors
Piezoelectric products	92,736	14.7%	81,585	13.7%	-Ceramic filters -Ceramic resonators -SAW filters -Piezoelectric censors -Piezoelectric sounders
High-frequency devices	105,421	16.7%	114,108	(7.6%)	- Multilayer devices - Short-range wireless communication modules including Bluetoothﾂｮ systems -Dielectric filters -Isolator -Connectors
Modules	79,072	12.6%	59,306	33.3%	-Circuit modules -Power supply products
Other products	102,917	16.4%	94,601	8.8%	-EMI suppression filters -Coils -Sensors -Resistors

Car Electronics Market

-In fiscal year 2007, which ended in March, 2008, sales of car electronics products reached 61.8 billion yen, which accounted for 11.2 percent of overall revenue. On a year-on-year basis, this was an increase of 300 million yen or 1.7 percent. (Sales of the products for car navigation systems, sonars, security devices, etc.)

Acquisition

In August 2007, the Company completed the acquisition of the power electronics division of C&D Technologies, Inc. in the U.S.A. Purchase price was 85 million USD. With the acquisition, the Company established Murata Power Solutions, Inc.. The new subsidiary will develop, manufacture and sell module products such as DC-DC converters and AC-DC converters.

Establishing subsidiaries

In August 2007, the Company established Murata Electronics Plant Shenzhen Co., Ltd. in China. It produces and sells module products.

Restructuring business

-In March 2008, the Company withdrew from production in Brazil. Manaus Plant of Murata Amazonia Industria E Comercio Ltda. (MAB) was shut down. The plant produced trimmer capacitors and ultrasonic sensors and conducted taping processing. (Press release December 17, 2007)

Recent developments in Japan

-Improvement of production structure

Kanazawa Murata Manufacturing Co., Ltd.

In November 2007, construction of the sixth production building was completed.

>>> See Investment for more details

-The Company / Yasu Plant

In January 2008, construction of a material production building completed.

>>> See Investment for more details

Izumo Murata Manufacturing Co., Ltd.

In January 2008, an additional production building was constructed.

>>> See Investment for more details

Business plan

-The Company aims to achieve sales of 1000 billion yen and operating income of 170 billion yen in FY2015 (ending March 2016).

R&D Structure

Facility	Location	Overview
Yasu Plant	Yasu, Shiga Pref.	-Research and development of industrial engineering, electronic materials and thin-film process technology
Yokohama Technical Center	Yokohama, Kanagawa Pref.	-Development of information communications and function module products
Development building at headquarters	Nagaokakyo, Kyoto Pref.	-Development of wireless modules, etc. -The third R&D facility following Yasu and Yokohama completed in October 2007.
Yokaichi Plant	Higashi-omi, Shiga Pref.	-Development of materials process
Research Center for Next Generation Technology	Kyoto, Kyoto Pref.	-Research and development of new technology and new business fields

R&D Expense

(in million JPY)	FY2007	FY2006	FY2005
Amount	42,281	38,670	34,696

Main R&D activities (FY2007)

The Company works on developing lithium-ion secondary batteries for HEV. These are expected to replace the conventional nickel hydride batteries.

Capital Expenditure

(in million JPY)	FY2007	FY2006	FY2005
Amount	125,557	99,651	51,040

Domestic Investments (FY2007)

-Kanazawa Murata Manufacturing Co., Ltd.

In November 2007, construction of a new production building was completed. The overview of the new building is as follows:

Item	Description
Construction period	November 2007 - February 2007
Total investment	30 billion yen over 5years (including building and production facilities)
Production area	16,000 square meters
Building area	75 m x 105 m
Scope of business	Manufacturing high-frequency devices

The Company constructed a new production building to improve infra-structure for developing and producing high-frequency devices with thin-film microfabrication technology at its core. (Press release November 1, 2007).

-The Company/Yasu Plant

In January 2008, construction of a material production building was completed. The overview of the new building is as follows:

Item	Description
Construction period	April 2007 - December 2007
Total investment	5.5 billion yen (excluding expenses for production facilities)
Floor area	18,095 square meters
Building area	75m x 105m
Scope of business	Developing and manufacturing ceramic materials to be used in ceramic electronic parts

Yasu Plant is the Group's biggest R&D facility and takes a major role in research and development of production technology, electronic materials, and thin-film processing technology (Press release January 8, 2008).

-Izumo Murata Manufacturing Co., Ltd.

In January 2008, an additional production building was constructed. The overview of the new building is as follows:

Item	Description
Construction period	April 2007  - January 2008
Total investment	About 20 billion yen (including facilities)
Building area	5,007.65 square meters
Floor area	27,460.73 square meters
Scope of business	Manufacturing electronic parts

The Company aims to enhance production capacity of multilayer capacitors used for general purposes, especially high-capacity multilayer ceramic capacitors, demand for which is significantly growing. Additionally, the Company plans to start producing new products. (Press release January 24, 2008)

Capital investment plans for FY2008

Facility (Location)	Investment plan	Planned amount of investment (million yen)	From	To
The Company Yasu Plant (Yasu, Shiga Pref.)	Installing R&D equipment and production equipment to manufacture semi-finished products	9,000	Apr. 2008	Mar. 2009
The Company Yokaichi Plant (Higashi-omi, Shiga Pref.)	Installing additional equipment to manufacture raw materials	5,100	Apr. 2008	Mar. 2009
Kanazawa Murata Manufacturing Co., Ltd. (Hakui, Ishikawa Pref.)	Installing additional equipment to manufacture high frequency devices and building a new production facility	14,100	Apr. 2008	Mar. 2009
Fukui Murata Manufacturing Co., Ltd. (Echizen, Fukui Pref.)	Installing additional equipment to manufacture capacitors, etc.	7,900	Apr. 2008	Mar. 2009
Izumo Murata Manufacturing Co., Ltd. (Hikawa, Shimane Pref.)	Installing additional equipment to manufacture capacitors	6,100	Apr. 2008	Mar. 2009