HDMI cables

	Mainland China's Huaruifuhai has an HDMI cable that features a 24K goldplated connectors.

The rapid adoption of HDMI 1.3 in many industries and products is generating more momentum for China’s HDMI industry, including cable assemblies. Makers expect the supply of HDMI 1.3 products in China to grow to 80 million to 104 million units in 2009. Estimates from HDMI Licensing LLC place the number of devices supporting the interface at 300 million units worldwide in 2009, the bulk of which will come from China.

Relatively higher profit margins in HDMI 1.3 cable assemblies compared with low-end and midrange HDMI products are attracting new entrants and urging established makers to realign their production focus. Local production of HDMI 1.3 cable assemblies has thus significantly grown in recent years, pushing the line into China’s mainstream cable assembly supply.

Many suppliers continue to offer HDMI 1.1A models due to the lower production cost. However, capacity expansions in previous years have led to a near-saturated market for HDMI 1.1 or 1.2 cable assemblies, resulting in thinner profit margins. HDMI 1.1 or 1.2 cable assemblies currently make up about 10 percent of China’s total cable assembly yield, according to local manufacturers. Suppliers predict that cable assemblies dedicated to early HDMI versions will eventually be phased out as demand for HDMI 1.3 products continues to rise, specifically in the European Union and the United States—China makers’ biggest markets with 80 percent aggregate export share.

Of all HDMI versions, HDMI 1.3 supports the highest bandwidth at 340MHz and fastest transmission at 10.2Gbps. It is most effective in sending uncompressed audio and high-definition video signals over a single cable. Consequently, the application range for HDMI 1.3 cable assemblies continues to expand and now encompasses PCs and set-top boxes, digital still cameras and video recorders, portable media players (PMPs), HDTVs, HD DVD or Blu-ray players, and gaming devices such as Sony PSP, Microsoft Xbox and Nintendo Wii. HDMI Licensing LLC expects that new applications will emerge in 2009, including Dolby TrueHD and DTS-HD Master Audio. Increased adoption in the PC and portable device markets is likewise anticipated.

The expanding application base is further stoking an uptrend in the production of HDMI 1.3 cable assemblies. With the cost of producing HDMI 1.3A cable assemblies now only 10 percent higher than the 1.1A version, more makers are expected to make the switch.

The narrowing production cost gap is aided by the increased use of more cost-efficient raw materials, such as copper-coated aluminum (CCA) and copper-coated steel (CCS) wires instead of the usual, more expensive oxygen-free copper (OFC), ultra-high purified OFC and monocrystal copper wires. Suppliers in China consider using thinner wires as long as these will not compromise overall performance. High-end models still use OFC, ultra-high purified OFCand monocrystal copper wires.
R&D emphasizes low attenuation, skin effect
HDMI stands ground against DisplayPort
Makers expanding offerings despite challenges
Growing supply plays up 1.3 models
Makers focus on connectors

China-made HDMI cable assemblies typically have AWG24 or AWG22 cables with copper wire conductors to facilitate low attenuation. These generally use silver-coated copper wires to reduce skin effect—the tendency of electric current (AC) to spread out near the conductor’s surface rather than at the core—and improve transmission performance. Tinned copper is the standard wiring material used and is the most cost-effective.

Gold-plated connectors are typically used for high-end models, and nickel-plated connectors are usually for entry-level and midrange products. In addition to better aesthetic design, connectors with gold plating help enhance signal transmission. Most China HDMI cable assembly manufacturers outsource connectors from Taiwan companies with factories on the mainland.

Some cable assembly makers targeting the high-end market integrate noise-suppressing devices at both ends of the cable. Others integrate heat-shrinking tubes to the end of each inner wire for optimum soldering and reduced risk of short-circuiting.

Common in mainstream products is the double-shielding design, usually done using aluminum polymer film or silver paper band, and tin-plated braiding. High-end models feature heavy-duty triple shielding, which entails adding another layer of aluminum polymer film or silver paper band for maximum deflection of interference and enhanced signal purity.

PVC and PE are the most popular choice of plastic for insulation. Some China makers use low-smoke, halogen-free insulation materials, but mostly for high-end models as these materials cost 50 percent more than plastic. However, some companies use these environment-friendly materials for their midrange products because these can be bought at lower prices from long-term local suppliers.

PE and PVC are likewise extensively used as cable sleeve materials because these feature high flexibility, color fastness and fine finish. These plastics also have high resistance against fire, humidity, and wear and tear, as well as feature enhanced EMI or RFI.

Outer sleeves or jackets normally come in solid black, but most makers accommodate custom color specifications. An increasing number of cable assemblies from China feature color-embedded nylon outer sleeves. High-density nylon meshwork outer sleeve not only adds to the cosmetic appeal of the cable assembly but also helps improve cable tension.

	This HDMI-to-DVI(18+1) cable assembly from mainland China's Huaruifuhai comes with a nickel-plated connectors.

Industry experts forecast that 2009 will give both HDMI and DisplayPort another market boost, with large-screen flat-panel displays (FPDs) and PC monitors that support both interfaces inundating the market.

The number of devices supporting DisplayPort will exceed 263.3 million units by 2012, according to iSuppli. The interface piggybacks on support from industry giants Intel, AMD, Nvidia, HP, Dell, Samsung and Lenovo. China makers started releasing DisplayPort connectors, cables and assemblies in early 2008 in response.

Initially targeted for PC applications, DisplayPort has evolved into a 1.1a version that has slightly better overall performance than HDMI. DisplayPort delivers up to 10.8Gbps data rate and supports as many as six 1080i or three 1080p video streams on top of audio stream. Compared with HDMI, DisplayPort has more flexibility in terms of embedded system applications for mobile phones and portable devices.

DisplayPort 1.1a applications now include FPDs and projectors.

Meanwhile, HDMI 1.3 supports a TMDS bandwidth of up to 340MHz and 10.2Gbps data rate. It features 1080p at 120Hz, 720p at 240Hz and 1080i at 240Hz refresh rates, as well as 1440p resolution.

China makers are banking on new developments in HDMI 1.3 to strengthen their hold on the market. For instance, HDMI 1.3 promises support for lossless HD audio formats such as Dolby TrueHD and DTS-HD Master Audio, which are embedded in Blu-ray DVDs and next-generation home theater systems.

HDMI Licensing LLC reports that developments are underway to improve the interoperability of HDMI 1.3 and support Deep Color display (sometimes regarded as the successor to True Color), x.v.Color capabilities, and higher bandwidth 3D applications.

Since many China suppliers usually have both HDMI and DisplayPort cable assembly lines, they are not adversely affected by the escalating rivalry between the two standards. Many companies project that the two standards will co-exist in the long term, although a good number of China makers are leaning toward HDMI, predicting it will follow in the footsteps of USB and become the de facto industry standard in the digital A/V sector. As such, many suppliers are aligning R&D efforts in step with the anticipated vertical market applications for HDMI and its increased penetration in portable devices and PCs.

	Direct of mainland China offers integrated HDMI solutions, such as HDMI cables, HDMI adapters and HDMI splitters.

China’s 1,000 or so suppliers of HDMI cable assemblies also make other HDMI products, such as adapters, splitters, switches and extenders. Rising worldwide demand for DisplayPort has also encouraged many China companies to include related products in their portfolio.

More than half of China suppliers are based in Guangdong, making the province the major production hub for HDMI cable assemblies in the region. The largest concentrations of makers in Guangdong can be found in Shenzhen and Dongguan. Other makers are scattered in Jiangsu and Zhejiang provinces. Suppliers in Shenzhen, Changzhou in Jiangsu, and Ningbo and Hangzhou in Zhejiang dominate the low-end and midrange HDMI cable assembly sectors in China.

China makers focus on HDMI cable assembly production instead of HDMI connectors due to the former’s lower technology entry barrier and less-expensive production facilities required. Suppliers mostly concentrate on 19-pin type A HDMI cable assemblies for digital consumer electronics, but some also offer 29-pin type B and 19-pin type C cable assemblies. Most cable assemblies feature 5V voltage and 100 impedance.

The few companies that offer 29-pin type C HDMI cable assemblies can make dual-TMDS, which supports higher bandwidth transmission, as well as dual-link DVI interconnection.

Manufacturers continue to brace themselves for rising production costs stemming from continued increases in the cost of labor and raw materials, particularly copper, aluminum, gold and silver. The stronger yuan added pressure to already eroded profit margins.

Many China companies have adjusted their growth forecasts due to these internal factors, as well as the financial crisis in key markets such as the US. A growing number of suppliers are planning to raise their export prices but will have to limit the adjustment to avoid risking their price competitiveness.

For many companies, the most pressing concern is to secure enough orders to maintain normal operations in their factories. Some suppliers are looking to optimize their processes and use automated equipment to improve their production efficiency and reduce wastage, toward eventually lowering overall cost.

Hong Kong’s mainstream supply of HDMI cable assemblies is dominated by 1.3 models. Although earlier-generation cable assemblies are still available, most suppliers have stopped promoting these to focus more on 1.3 models.

Type C cable assemblies are widely available, but shipments are a fraction of type A. Suppliers expect adoption of type C cable assemblies will pick up in the next two years as more portable electronic devices support the interface.

Many Hong Kong suppliers of HDMI 1.3 cable assemblies offer type A-type A, type A-type C, and type C-type C versions. These usually come with gold-plated connectors and plastic or metal hoods. Standard 1.5m, 3m and 5m cable lengths are available, as are custom lengths. Products also come with adapters, switches and extenders.

With almost every cable assembly manufacturer in Hong Kong joining the HDMI bandwagon, the supplier base has ballooned to about 20 companies. The supplier population is expected to continue growing as even suppliers of

A/V appliances enter the fray by bundling the cables with their high-definition devices or selling them separately.

The stiffening competition due to the expanding supply market is pressuring suppliers to enhance their competitiveness by developing visually appealing designs, upgrading production efficiency, and shortening time-to-market and lead time. Some companies are starting to capitalize on the HDMI trend by adding HDMI adapters, switches, splitters and extenders to their product roster. Some suppliers have also begun developing HDMI wall plates that can be integrated with other A/V connections.

Large-scale companies offer HDMI cable assemblies that have passed 1.3b1 specifications. These suppliers can tap the high-end segment with their capability to produce hundreds of models suitable for different consumer profiles. For instance, D&S Industries (HK) Ltd’s HDMI premium cable series features 24K gold-plated connectors, metal hoods, precision foam dielectric, detailed shielding, and 100 percent overlapped foil protection against noise and interference. The company’s next-tier cables, the professional series, have semi-metallic plug shells and mixture of metal and plastic plug moldings.

Most Taiwan suppliers concentrate more on HDMI connectors than cable assemblies as the former require a higher technology threshold. Most companies capitalize on advanced technology, automated production lines and comprehensive testing equipment to go upmarket and not limit themselves to HDMI cable assemblies. Besides connectors and cable assemblies, many companies also supply HDMI adapters, extenders, switchers and splitters.

In the HDMI cable assembly market, Taiwan companies lead the high-end segment, with many companies specializing in custom designs and technical specifications. A growing number of companies are stepping up to HDMI 1.3, whose higher quality makers said they can leverage to strengthen their edge in the overseas markets and widen the gap between their products and those made by their mainland China counterparts.

Most Taiwan companies have set up operations in Suzhou and Kunshan in Jiangsu province, as well as in Dongguan in Guangdong, mainland China. The reason for this is the relatively higher production technology prevalent in these areas, where critical digital consumer electronic segments are also based.

Some Taiwan companies conduct cable extrusion in-house, which is rare for mainland companies. One such maker is Bafo Technologies Corp, which has launched data-transfer HDMI cables certified by Microsoft for Windows Vista. These cables allow easy upgrade from Windows XP to Windows Vista or data transfer between two PCs with Vista OS.

Other companies like David Electronics Co. Ltd specialize in OEM and ODM, able to produce all types of HDMI cable assemblies for ally market segments.

Despite the pressures of price competition from mainland companies, Taiwan makers are keeping their quotes stable instead of offering low-priced products and compromising quality.