Sourcing Center: Taiwan leverages history of manufacturing connectors

The connectors line is among the cluster of electronic components industries on which this tiger economy is built and developed.

With an area of 360,000sqkm and a population of about 23.5 million, Taiwan may be considered small but is a key economic force, being one of the Four Asian Tigers. Like Hong Kong, Singapore and South Korea, it has achieved much through rapid industrialization from the 1970s.

With emphasis on electronic components, the island has seen the growth of six major industries such as semiconductors, LCDs, connectors, PCBs, LEDs and switching power supplies, making it a major production base for these categories.

In connectors, Taiwan accounts for more than 10 percent of total shipments worldwide. It has a manufacturing pool of between 200 and 300 companies, offering comprehensive selections for the consumer electronics, computers and peripherals, communications, automotive, medical, industrial and military sectors. The top 10 suppliers are Foxconn, JMT, JAT, JWT, WST, HR, CviLux Corp., Leoco, TYU and CS.

Based on application, connectors for computers make up the biggest category in Taiwan, with deliveries representing more than 80 percent of global aggregate volume. In the laptop segment, there are at least 200 suppliers with an annual sales value ranging from $32.8 million to $230 million.

Besides an R&D advantage honed through decades of specialization, connectors makers capitalize on the cost effectiveness of conducting production activities in mainland China. The offshore option provides access to greater land, material and manpower resources, and brings companies in close proximity to downstream markets.

It is the reason they choose to operate in the electronics hubs in the provinces of Guangdong, Zhejiang and Jiangsu. In thelast, there is the Taiwan Precision Manufacturing Industry Park built at the cost of $147 million at the Xuzhou Economic Development Zone. Foxlink invested $470 million in the construction of four facilities in the mainland.

It is expected that more connectors suppliers from Taiwan will build factories in the mainland in the next two to three years.

Focus on the high end

Intensifying competition is spurring Taiwan connectors manufacturers to continue stepping up product development, emphasizing high density and frequency, and miniaturization corresponding to requirements in upscale markets.

Efforts on improving density target support for up to 5,000 cores, while the trend is toward millimeter wave technology to meet the elevated operating frequencies of application products. For smaller forms, companies concentrate on finer pitches and slimmer profiles.

All this is pursued to ensure any customization can be matched. Orders based on buyers' specifications usually account for 30 to 80 percent of the business.

Suppliers allocate a portion of revenue for R&D. Kenpol Precision Technology Inc. spends between $30,000 and $50,000 for this every year. Its recent releases include RF, circular and spring-loaded connectors used in medical, communications, industrial control and consumer electronics products. The maker will focus on developing connectors for next-generation communications equipment.

The selection in Taiwan includes PCB, RF and fiber-optic connectors, specialty types such as those for SIM cards and medical products, and circular kinds. Pin headers, CPU sockets and terminal products are also widely available.

Companies source metal and plastic materials from Taiwan, the mainland or other regions as required.

The cost of these inputs will remain generally steady the rest of 2020, and will keep product prices unchanged.

Market stability

Connectors manufacturing in Asia began strongly in Japan before moving to Taiwan, then to the mainland and lately to neighboring areas such as Vietnam. The latter development has come into focus, especially amid intense competition, and the trade war between the US and the mainland.

Taiwan companies with mainland factories reported a sales drop of 5 to 10 percent in 2019, while those with other facilities elsewhere are confident of continued revenue rise. Some plan to raise output to meet demand. CviLux looks forward to maintaining a 5 percent sales increase in the months ahead, expecting to benefit from having started mass production in its new plant in Vietnam.

Overall, however, the connectors sector is anticipated to remain generally stable.

Taiwan itself has been able to sustain growth of its economy, although more sedately in recent years. GDP is estimated to have climbed by up to 2.2 percent in 2019 compared with the previous year's performance of 2.6 percent after realizing $589.4 billion. In 2020, a more moderate target has been set due to the possible effect on exports from the coronavirus outbreak.

Amtek Technology Co. Ltd

Year established: 1997
Head office location: New Taipei City, Taiwan
Key export products: Connectors
Annual export sales: $12.8mn
Average monthly exports: 40,000 units
Total monthly capacity: 50,000 units
Export ratio: 80%
Main export markets: Europe

Model: 5HSPC02-111MPNIX-02
MOQ: Negotiable
Delivery: 7 days
Description: SFP connector; copper alloy cage, EMI shielding spring; aluminum heat sink, stainless steel clips; clear PC light pipe; -40 to 85 C operating temperature

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Chyao Shiunn Electronic Industrial Ltd

Year established: 1985
Head office location: New Taipei City, Taiwan
Key export products: Connectors
Annual export sales: $56mn
Average monthly exports: 550mn units
Total monthly capacity: 550mn units
Export ratio: 100%
Main export markets: Asia, Europe, US

Model: JS-1124
MOQ: Negotiable
Delivery: 7 days
Description: Wire-to-board connector; tin-plated phosphor bronze crimp terminals; matte- or tin-plated brass pins; UL94V-0-rated nylon housing, base;rated 100VAC/DC, 0.8, 1 or 2A

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CviLux Corp.

Year established: 1990
Head office location: New Taipei City, Taiwan
Key export products: Connectors
Annual export sales: $51.4mn
Export ratio: 50%
Main export markets: Europe, North America, Asia

Model: CP60 Series
MOQ: Negotiable
Delivery: 7 days
Description: Power connector; dual rows, 2 to 12 pins; 5.7mm pitch; 12 to 16AWG wire range; 12 to 23A rating; for industrial, home, automotive electronics

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Kenpol Precision Technology Inc.

Year established: 1984
Head office location: New Taipei City, Taiwan
Key export products: Connectors
Annual export sales: $5.6mn
Average monthly exports: 4mn units
Total monthly capacity: 5mn units
Export ratio: 80%
Main export markets: Europe, US, Asia

Model: Coaxial+Power
MOQ: 1,000 units
Delivery: 14 days
Description: Coaxial and power connector in 1; stainless steel or brass; phosphor bronze, BeCu or brass contacts; PTFE insulator

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Kunming Electronics Co. Ltd

Year established: 1978
Head office location: Taipei, Taiwan
Key export products: Connectors
Annual export sales: $4.2mn
Average monthly exports: 3mn to 4.2mn units
Total monthly output: 5mn to 7mn units
Export ratio: 60%
Main export markets: Europe, US, Asia

Model: KMUSBC12AF24S1BR
MOQ: Negotiable
Delivery: 7 days
Description: USB 3.1 Gen 2 connector; female;stainless steel shell

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