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In this edition of MarketEye, John MacWilliams of Bishop & Associates provides a detailed overview of the diverse connector industry. He also discusses the role of distribution in the connector industry. .

Overview of the Connector Industry and its Technologies

John MacWilliams April 17, 2006
 
 
 
Global Market: In 2005 the connector industry produced $35.5Bn in worldwide revenues. The largest market segments were: Computer/Business Equipment, Automotive, Telecom/Datacom and Industrial, which together represented 75% of the total electronic connector market.

 

Connector Science: True connectors are designed to connect and disconnect a package, circuit or cable connection repeatedly without causing distortion or other electrical problems. At first glance that seems easy, but the nature of intermetallics, fretting corrosion, plating chemistry and other connection issues can cause serious problems. Therefore, there is significant, complex science in connectors, with many years of a knowledge base behind all long-term players in this industry. As the marketplace has gone global, some of this knowledge is not present with knock-off suppliers- particularly as it relates to contact physics, insulation displacement, and the quality of plating and other design and materials issues.

Regional Markets: The largest regional connector markets are: North America, Europe, Japan, Asia Pacific [Taiwan, South Korea, Malaysia, Thailand, etc], and China. More and more electronic assembly is going to China, so over time that huge emerging economy will become the largest connector market, both for export and internal consumption. China and AP combined already challenge NA and EU as the largest, considering where connectors are installed into equipment.

At the present time, China has become the preferred locale for contract manufacturing, with a feedstock of OEM business, and distribution activity, coming from the United States and other regions. Connector manufacturers have and are locating there to support CEMs and OEMs doing business in China. Most of the technology is being imported, with more than $50B in net foreign investment going into that country from all area. Connector investments are surely in the millions. Also, in the connector field, China’s current role is mostly feed stock and assembly, using varying degrees of bench-type automation and leveraging China’s low cost tool and die making. A lot of connector manufacturing there is still hand assembly leveraging China’s cheap labor.

Technology-wise, we expect to see China’s technical capabilities expand greatly over the next decade. But for some time they will remain dependent on external technical and market forces, including design and engineering. Assuming there is no political conflict or natural disaster, the China electronics market will mature and manufacturing emphasis will shift from export to internal consumption.

Equipment Market Requirements: Globally, each equipment market segment has its own unique requirements, which have evolved over time as semiconductor technology has matured and circuits have gone digital CMOS. In connectors, this has occurred at a pace somewhat slower than semiconductors but faster than passive components or PC boards in terms of the number of new designs. Also, unlike passives, which went through a major upheaval when chip components came in, connectors have continued to evolve from their traditional shapes and sizes – mainly because their primary function hasn’t changed.

 

Other, relatively smaller connector markets have also evolved with some interesting twists and niches. Examples are seen in medical electronics, transportation, military/aerospace and consumer. Overall, the buzzwords people sometimes use with connector trends are:

Smaller, Thinner, Lighter, Higher Density and Faster

Core Connector Technologies:
  • Materials technology – metal, plastic, ceramics, glass, organic materials to meet specific needs.
  • Contact fabrication – stamping, machining of blade and pin & socket contacts.
  • Plating – tin, nickel, gold, palladium, other – often-selective plating to reduce cost.
  • Contact physics & mechanics – the science of designing a reliable interconnect.
  • Connector design – now more electronic than mechanical via design simulations and CAE.
  • Design for manufacturability – increasingly important in a global mfg. supply chain.
  • Mfg. – metal & plastic parts, injection molding, machining, powder metallurgy, etc.
  • Packaging – for automation, surface mount assembly: trays, tape & reel, etc.
  • Attachment – cable termination, surface mount technology, press-fit, ergonomics, etc.
  • Environmental electronics – Lead & halogen-free: RoHS, WEEE directives.
  • Alternative technologies – Fiber optics, wireless, micro-fabrication, BGA, etc.

Some of these core technologies have their limits – particularly those involving minimum dimensions and circuit speed. While semiconductors approach photolithographic size limits, connectors too have boundaries. These include minimum contact size beyond which contacts become too fragile, and maximum bandwidth as electronic circuits move into the multi Gigabit per second realm. On this latter point, connectors are basically a benign pathway, offering less signal distortion than, say, printed circuit boards. There still are issues here, including inductance and near end cross talk which can be alleviated by PCB, connector and pin field design.

What we find here in the areas of predicted barriers is very interesting:

  • ICs, Cu circuits and connectors keep getting better – some reaching beyond predictions.
  • Fiber [and wireless] is well advanced and capable of replacing Cu circuitry where needed.
  • Innovative connector designs are solving the size and density issue.
  • Cost is the ultimate leveler, creating acceptable design trade-offs in many areas.
  • Industry standards, often resulting from above, create a more stable design environment.
  • Metallic-based connector systems are here to stay with few technical barriers seen.
  • Fiber optic connectors are breaking out into some former Cu-based applications.

Many Applications and Market Niches: All of the technologies mentioned above – and some others - come to play in this huge variety of connector applications. And while standards do play an increasing role in this industry, many applications still require some degree of customization, or may specify a particular manufacturers’ design because of past experience, a specific parameter, print position or vendor preference.

Also, within these broad market segments there are submarkets with even more specific interconnect requirements. The list is too broad to mention all, but here are a few examples of segments with specific needs: medical ultrasound, medical implants, industrial Ethernet, marine electronics, electric motors, HVAC, appliance, broadcast, CATV, microwave, commercial aviation, telco outside plant, etc.

 

There are also some crossover markets, particularly in high volume applications.

For instance, there is an increasing degree of convergence between connector specifications in computers – particularly with the PC market, consumer electronics and telecommunications. USB, Mini-USB, IEEE1394 and memory card sockets come to mind in these applications.

There is also commonality of interconnects in specific applications – such as hard disk drives [both parallel and the new Serial ATA], LCD displays [see above], PC cards and board to wire headers. Here, the interconnect requirements tend to be the same or similar regardless of the market.

 

 

Connectors are Unique: The importance of this background is to help understand that the connector industry and its underlying technologies support a huge variety of applications and markets. This has led over the years to an industry that is somewhat unique in electronic components in its diversity. This is because connectors are an assembly of metal and plastic parts that can be mixed and matched in a piece-part assembly process, rather than being ‘hemmed in’ by a more rigid process control or chemical process-manufacturing environment as with many other components.

Thus, connector technology has a well-defined set of underlying core competencies, but an almost endless variety of product implementations. This depends on the specific interconnect need, the varieties of which are made possible by the piece-part nature of the connector process.

This has led to an industry with hundreds of suppliers – most of who specialize in one or a few product areas. Large companies tend to have broad product lines developed both internally and through the continuing process of industry consolidation. The top 10 suppliers represent 60% of the market, but that leaves $15Bn to be spread across 250 or more companies.

Connectors and Electronics Distribution: For many years connectors have been an important component for electronics distribution. The huge variety of connectors tends to benefit specialization, which is what TTI does. Some key points about connector distribution:

  1. Many different connector designs make a distribution partnership important – even for large OEMs operating in a just-in-time environment. For smaller OEMs, it is vital.
  2. Distribution can tailor inventories to meet specific customer needs, reducing supply chain issues that often come with direct purchases from such a large variety of products.
  3. Distribution may be even more important in the current outsourcing environment where many applications get ‘decoupled’ from their original OEM supply chain.
  4. A specialist distributor will have a better understanding of these needs and be able to suggest the best solution to meet the customer’s requirement.

Author: John MacWilliams, Bishop & Associates. Former AMP, TRW and IRC marketing and business development manager. Author of Connector Technology Roadmap, International Technology Roadmap of the Electronics Industry: www.nemi.org.

John’s email: electronicsindustry@comcast.net