The move is to keep up with booming demand in the rapidly growing automotive chip market.

The Japanese chip maker aims to increase by 20% its MLCC production capacity to further serve  electric vehicle or EV market.

MLCCs are key building blocks in today's modern electronics devices, making up approximately 30% of BOM, bills of materials. It helps control electric currents to offer high stability and low losses for resonant circuit applications, high volumetric efficiency for buffer, by-pass, and coupling applications.

For example, more than 1,000 MLCCs are integrated in smartphones used today. Higher the performance the device has, the more MLCCs are integrated in it.

In the past MLCC market were being grown around home appliances and IT devices, but today the MLCC market is to grow around the automotive market as cars comes built with more electronics in it.

According to industry sources, approximately 12,000 MLCCs are integrated in electric cars and more than 1.5 million electric cars are projected to be sold in the year. It would translate into huge markets for MLCC makers, and that’s where Murata plans to find its new growth engine.

The Japanese MLCC maker is currently leading the global MLCC market with a 40% share. Following on the heels is Samsung Electro-Mechanics that has around 20% share of global MLCC market.

As supplies remains tight, Murata’s turn to automotive market away from IT devices will likely come as a chance for second-runners like Samsung Electro-Mechanics and Yageo of Japan.

Meanwhile, prices of MLCCs are constantly rising.

At the time, automotive MLCC market is dominated by three Japanese MLCC makers including Murata, TDK, and Taiyo Yuden.

According to securities brokerage firm Shinyoung Securities, automotive MLCC market is projected to annually grow on average annually 10.8% through 2020. Overall MLCC market is expected to grow annually at average 2.9%.