HDMI cables

	Hentek produces both HDMI and DisplayPort cables in its product line to cut a bigger share of the market

The global output of devices supporting HDMI—HDTV, HD DVD players, PCs, set-top boxes (STBs) PS3, projectors and next-generation PMPs—continues to sustain the development of mainland China’s cable and assembly industry. Further growth is imminent, market analysts predict, and the market for such products will likely expand annually by an average of 30 percent.

Mainland China’s aggregate output of HDMI 1.3 cable assemblies will reach 80 million units, valued at about $160 million, by the end of 2008. Production is estimated to reach 104 million units in 2009, and achieve a market value of about $208 million.

Of the more than 1,000 suppliers of HDMI cables and assemblies in mainland China, 400 have already shifted production to HDMI 1.3 cables and assemblies this year. About 80 percent of their output is HDMI 1.3 type A cable assemblies, while the remaining 20 percent are type C cables assemblies with small connectors. It is estimated that 40 companies on the mainland enter or diversify into the HDMI cable assembly line each year. Leading makers and exporters are mostly based in the provinces of Guangdong, Jiangsu and Zhejiang.

HDMI LLC, the organization responsible for licensing HDMI-enabled products, reports a member count of 800 companies worldwide. Twenty-four percent of these companies, mostly makers of cables and connectors, consumer electronics and PCs, are from Greater China. The number of licensed HDMI adopters in the region is expected to increase to more than 200 in 2008.

Widespread adoption of HDMI 1.3 standard notwithstanding, mainland China’s HDMI cable and assembly suppliers face sluggish demand due to the slowdown of the global economy. The continued strengthening of the yuan against the U.S. dollar and fluctuating oil prices are raising manufacturing costs. Prices of commodities such as copper, aluminum, gold and silver have been continuously increasing.

Compounding the situation, mainland China suppliers of HDMI cables and assemblies face possible competition from DisplayPort, a standard released by the Video Electronics Standards Association (VESA) in 2006. However, the threat is not immediate, according to most companies. HDMI dominates in consumer electronics, while DisplayPort is still building its dominance in the PC segment and embedded system applications.

	Mianland China-based Hentek offers HDMI 1.3a-compliant round cable that supports ultra-high speed transmission

From the earliest HDMI 1.1 version introduced in 2002, HDMI has evolved to support various standards—from HDMI 1.2 to HDMI 1.2a, and in 2006, HDMI 1.3.

The major difference between HDMI 1.3 and HDMI 1.1 and 1.2 lies in the bandwidth supported. Although versions 1.1 and 1.2 are equipped with enough bandwidth (165MHz or 4.95Gbps) to support HDTV format, HDMI 1.3 offers a higher bandwidth of 340MHz (or 10.2Gbps data transfer rate) ideal for future HD display devices.

HDMI 1.3 supports high-bandwidth digital content protection (HDCP), display data channel (DDC) and consumer electronic control (CEC), and has been widely adopted in HD FTVs, Blu-ray DVD players, computers and game consoles, as well as other digital devices.

HDMI 1.3 also provides higher resolutions, with support for 48-bit color space and the xvYCC color standard. It also supports more audio formats such as the new automatic audio synchronization and lossless HD audio formats Dolby TrueHD and DTS-HD Master Audio.

Cables and assemblies that support the standard are widely applied in consumer electronics products such as LCD TVs, HD DVD players, personal video recorders, STBs, HDTVs, plasma TVs, rear-projection TVs, LCD projectors as well as A/V receivers and monitors.

The penetration rate for all versions of HDMI continues to accelerate, creating inroads into large market segments such as PCs, game consoles, Blu-ray disc players, digital STBs and PMPs. Several PC manufacturers, such as BenQ, Sony and HP, have already released laptops equipped with HDMI ports in early 2007.

Makers forecast 19-pin type C cable assemblies to gain significant growth in 2009 as they target portable devices with smaller interface and are compatible with type A versions, allowing the two interfaces to connect to a single adapter.

Type C cable assemblies with a 29-pin connector can support dual TMDS for higher bandwidth transmission and dual-link DVI interconnection. However, demand for type C cable assemblies, both 19- and 29-pin, is rather small as there are only a few applications requiring such a high bandwidth.

The manufacturing technology for HDMI cable assemblies is regarded as mature. Makers are focusing more on cosmetic and shielding design to improve quality and performance. Adoption of color-embedded nylon in high density braided outer sleeve gives HDMI cable assemblies better appearance and improve cable tension. For high-end models, triple shielding—adding another aluminum polymer film or silver paper band shielding—is becoming popular. Some makers forego soldering and instead, use heat shrink tubes at each end of the inner wires to prevent potential short-circuit risk.

To enhance performance of its HDMI 1.3 offerings, Ningbo Hentek Dragon Electronics Co. Ltd uses 24AWG or 28AWG copper wires. However, according to Liheng Gao, Hentek’s general manager, most mainland cable and cable assemblies makers prefer using copper-coated aluminum (CCA) and copper-coated steel (CCS) wires instead of the more expensive oxygen-free copper (OFC), ultra high-purified OFC and monocrystal copper wires in its high-end products to minimize production cost. Other makers plan on using thinner wires to cut production costs, provided it do not negatively impact their products’ quality and performance.

On the other hand, Wells Huang, general manager of Hangzhou Electronics Co. Ltd says that 80 percent of mainland China’s HDMI 1.3 cable assemblies output are 1.8m- to 3m-long solid silver-plated 24AWG wire-based models, applied mostly in HDTV signal transmission (108p, 1080i, 720p and 480p). Standard specifications include flat off-white PVC jacket, nitrogen-injected foamed PE dielectric insulator and triple shielding against RFI and EMI. Most products are RoHS-compliant.

Mainland China’s cable assemblies makers usually roll out conventional products for AV, computer and network in mass quantity before entering HDMI productions, according to Lilian Zhang, sales manager of Shenzhen Carve Electronics Co. Ltd. At present, Shenzhen Carve produces about 100,000 HDMI cable assemblies and plans to increase production by 20 percent in 2009.

Hangzhou Direct Electronics Co. Ltd turns out about 80,000 units of HDMI 1.3 cables per month. Production is forecast to grow by 50 percent by 2009.

Most makers still cannot afford to establish a complete HDMI test platform in-house due to high costs, thus they heavily rely on HDMI ATC for testing. Although less than 10 percent of their sales revenues go to R&D, a big chunk goes to testing equipment upgrades and purchases.

Although suppliers are generally bullish on the industry’s growth prospects, many have lowered their growth projections by 10 to 20 percent at least until the end of 2008. A large number of suppliers will resort to raising their export quotes in the coming months to counteract their falling profit margins. Some suppliers, however, are opting to keep their prices intact for fear of losing customers.

Suppliers are focusing on optimizing capacity utilization—rather than capacity expansion—by automating production processes and streamlining resource management. To attract more customers, makers are improving the form factors and packaging designs of their products.

Low-end HDMI 1.3 cable assemblies sell from $2 to $3, midrange and high-end products price range from $3 to $4 and $4 to $ 5.50 and higher, respectively. Prices depend largely on specifications; the aforementioned quotes apply to cable assemblies with 2m cables.

Most of the interviewed local makers provide low-end and midrange products, which represent 90 percent of the market demand, but they have the ability to provide high-end products by adopting good quality material as well as complex manufacturing and test process.

The bulk of mainland China-based cable and assembly makers export 80 percent of their output mainly to Europe and North America. About 90 percent of shipments are absorbed by these two regions; the remaining 0 percent goes to Asia and the rest of the world. Low prices remain the primary reason why most foreign buyers prefer to source cable assemblies from mainland China, said interviewed companies.