BY MATT VINCENT
China’s prominence as a manufacturer of connectivity products continues to grow, according to pair of reports recently issued by Research and Markets (www.researchandmarkets.com), a market research firm based in Dublin, Ireland. The first report contends that China is presently supplying approximately 33% of the world’s connector demands, while a second report sees cable and connector manufacturing capabilities in mainland China, Hong Kong, and Taiwan growing by about 17% this year.
Based on information from the China Electronic Components Association (CECA; www.component.com.cn), the first report (China Sourcing Report: Connectors) sees mainland China’s connector production output reaching 50 billion units by the end of 2004, up 42.86% from 35 billion in 2003. The report says the local Chinese connector industry registered an 18.28% growth in export value in 2004, and that this figure is expected to increase steadily, by 21.74% in 2005 and 20% this year.
The report finds that the connector industry in mainland China is made up of about 600 key connector manufacturers and approximately 400 small-scale and family-operated workshops. Most of these manufacturers are based in the provinces of Guangdong, Zhejiang, Jiangsu, and Shanghai.
According to the report, while a wide range of connectors are offered, the most common types made are computer, telecom, A/V, fiberoptic, PCB, and RCA connectors, as well as modular jacks, telephone plugs, and terminal blocks. Local connector manufacturers are also seen producing connectors suited to automotive and military applications, with the latter being strongly supported by the government.
A significant finding of the report is the manufacturing shift of foreign makers to the mainland. Over the past decade, mainland China has seen an influx of foreign connector makers, to the tune of about 300 connector manufacturers in the mainland that are foreign-owned or foreign-invested. Notably, the biggest connector makers in the mainland in terms of sales revenues are U.S.- and Japan-based.
The study sees 80% of the connector manufacturers in the mainland catering largely to international markets; Asia being the largest export destination. A majority of the companies ship 60% of their total output; the report finds that, collectively, the connector manufacturers surveyed shipped some 21 billion connectors in 2003. The companies’ combined annual sales totaled $3.1 billion in 2003, with exports accounting for $1.5 billion.
The report contends that, ultimately, local Chinese makers are fully automating their production processes and upgrading the quality of their products to stay globally competitive. The majority of the makers are ISO 9001-certified, while a number have received ISO 14000 approval.
Mainland makers are also adopting lead-free and other environment-friendly materials, as well as lead-free soldering techniques. According to the report, about 60% of connector manufacturers have shifted to “green” products, with many planning more environment-friendly production for next year.
A second study (China Sourcing Report: Cables & Assemblies) reveals that output of cables and assemblies from manufacturers in mainland China is projected to grow by 16.8% in 2006. The report notes that mainland China, Hong Kong, and Taiwan are home to about 1,150 active manufacturers of cables and assemblies. China alone is set to ramp up this year’s production by over 30% to meet the demands of consumer electronics, computing, and telecommunication industries.
The report profiles 84 key manufacturers of cables and assemblies in greater China, covering production issues and product trends, such as RoHS compliance. Production of coaxial, fiber-optic, flat-ribbon, spiral, RCA, DVI, RF, SCART, Cat 5e, DIN, and Cat 6 cables is considered, as well as production of cable ties and restrainers. In-depth profiles of 19 major suppliers provide a detailed look at manufacturing processes, QC capabilities, and R&D strategies.
Shipments of fiberoptic cables are expected to grow from $1.2 billion in 2005 to $4 billion by 2010, with the highest growth application coming from data centers, according to analysis of the market for high performance structured cabling systems. Shipments of coaxial cables also grew by approximately 15% in 2005, despite intense competition from other data transmission cables.
The study finds that growth of the cable and assembly industry has been spurred by demand for faster Internet connections and improved networking capabilities. Also, in mainland China, the cable and assembly industry is expected to grow significantly as the country’s multi-channel TV sector is projected to reach $7.3 billion by 2015, representing a compound annual growth rate of 12.5% for cable, satellite, and IP video on aggregate.
Due to a “low technological threshold,” says the report, the cable and assembly industry in greater China is now a “mature industry,” where the majority of the manufacturers “have been around for at least a decade.”
