Dongguan, key connector manufacturing hub

by Vianie Li & Cecile de Veyra

Dongguan has come a long way, from being the “world’s factory” of cheap products to an important sourcing hub in China’s electronics manufacturing industry. The city has been investing in R&D as part of its industrial transformation. It has attracted more than 4,000 national high-tech enterprises and 31 provincial innovative scientific research teams as of 2021, according to China Briefing. The China Spallation Neutron Source (CSNS), one of the top such facilities in the world, is also there and will soon be joined by the Greater Bay Area University. The latter is building two campuses, one in the Songshan Lake High-Tech Zone and the other in the Binhaiwan New Area, both due for completion in 2026.

In the production of connectors, Dongguan has a sizeable share, contributing between 30 and 40 percent of total shipments out of Guangdong, China’s undisputed manufacturing powerhouse. This is not surprising for an industrial city that plays host to hundreds of connector suppliers, including major homegrown players such as Luxshare and Shenglan as well as industry giants Amphenol, Foxlink and Foxconn.

Many companies in Dongguan’s connectors industry are operating in Changping, Shatian, Songshanhu, Shijie, Hengli and Liaobu. Songshanhu was designated Dongguan Songshan Lake Science City in 2020. This is where CSNS is located and also where the Songshan Lake Materials Laboratory was set up in 2018.

A more recent addition to Dongguan’s denizens is the recently completed Yuehai Electronic Interconnecting Industrial Park in Xiegang. A project of the Shenzhen Connectors Industry Association in cooperation with Yuehai Real Estate, it has a total area of 53,740sqm and is expected to attract domestic and overseas interconnect manufacturers in the coming years.

Other investment is also coming in. Dongguan-based WCON has allocated $73.5 million for a new project, which is scheduled to start trial production in 2023 and progress on a mass scale by 2025. Annual volume is expected to total 800 million connectors and turnover to reach $79.41 million once the facility is fully operational. Guizhou Space Appliance, meanwhile, has set aside $290 million to build a production base in Dongguan, which will mainly produce high-voltage, RF, optical and medical equipment connectors. Once running at full capacity, this factory is projected to realize a production value of $510 million.

Other interconnect companies in the city will continue to boost their output, having experienced increasing demand in the past two years and expecting this trend to persist in 2023 and 2024.

World’s top source

China ranks first in the global connector industry, gathering more than a thousand suppliers that include foreign companies. In 2020, it posted $20.184 billion or 32.18 percent of the total worldwide value, according to Bishop & Associates. This increased to $22.214 billion the following year and is forecast to remain on an upward trajectory through 2023, consolidating China’s leading position. AskCI is expecting this category to be in the region of $29 billion by end-2022 and maintain a two-digit growth rate in 2023.

Bishop & Associates projects the worldwide market will hit $90 billion in 2023, rising from $77.991 billion in 2021 and $62.727 billion in the previous year. Growth will continue and reach $98.12 billion by 2027, according to Allied Market Research.

Dongguan-made connectors

Manufacturers of connectors in Dongguan cater to various applications, mainly automotive, communications, consumer electronics, security, computers and peripherals, industrial and military. They offer a range of USB, HDMI, PCB, RF and fiber-optic connectors, and terminal blocks.

Products are generally made of copper with gold, silver or nickel plating and have a plastic or metal housing. These materials are sourced domestically or from foreign companies, depending on customer preference.

Based on demand, connectors for the automotive, communications and computer sectors will continue to drive Chinese companies’ R&D efforts in the years ahead. This is amid trends for electric vehicles, 5G, AI and smart manufacturing.

From the EV market, in particular, the connectors segment in China will achieve more than $1.47 billion by 2024, according to China Industry Information Research Net. Upgrades in driving, electrical and entertainment systems have raised requirements for high-voltage and -speed connectors. Mainstream rated voltage will be in the 400 to 600V range or go as high as 800V in the coming years.

To enhance competitiveness and benefit from these trends, connector suppliers in Dongguan will pursue the development of midrange and high-end products.