Benefiting from Taiwan's well-established information-technology and telecommunications industries, Taiwan's connector makers have been concentrating on upgrading their manufacturing processes to widen their product categories for high-end markets.

With a solid market base in Taiwan, and being leaders in the manufacture of connectors in the Asia-Pacific region, makers generally have not felt the need to shift their production bases to overseas locations like mainland China, where the labor and land costs are cheaper.

Acknowledging increasing competition from Chinese rivals for low-end items, however, local makers say they still have to keep abreast of the latest market trends.



Overall, the most effective way for them to strengthen their R&D capabilities is to introduce new R&D concepts and facilities based on ISO9001 guidelines.

Expanding Business

Many report that business has expanded as a direct result. Zifor Enterprise Co., Ltd., one of Taiwan's leading makers of connectors and adaptors, says it has been keen at introducing and implementing new production and marketing strategies to stay in the upmarket vanguard.

"To cope with intensive competition from Chinese manufacturers as well as our domestic peers, we have to continually sharpen our manufacturing know-how and supply customers with top-notch products," says Andy Huang, president of Zifor. The company was granted ISO9002 certification in 1998, and ISO9001 certification in May this year, and boasts a 10-member product development R&D team.

Established in 1992, the company focuses on the production of high-quality RF coaxial-cable connectors and adaptors, including such series as MCX, MMCX, SMA, SMB, 1.0/2.3, 1.6/5.6, BNC, TNU, UHF, RCA, FME, TWINAX, as well as coaxial-cable assemblies.

"Taiwan's 3C industries, namely consumer-electronics, computer, and communications products, are well developed and are still booming—this provides us a solid ground and unique niche for development," Huang says.

He says that Zifor will focus on securing orders from buyers in the top 50% of the market pyramid. "Buyers in the top 50% of the global market are quality buyers who are unlikely to switch their orders to low-end suppliers, like those in mainland China, purely for the sake of price," Huang explains.

With more than 60% of its products sold to electronics companies in Taiwan, and emphasizing high-end products, Zifor doesn't see a need to move its production base to China, though the expanding market there is attractive, Huang says.

Zifor is the trading arm of Bo-Jiang Technology Co., Ltd., which operates a 2,100 square-meter plant in Hoshun Industrial Park in Tainan, southern Taiwan. With a workforce of 100, Bo-Jiang is currently operating at around 60% of its production capacity, according to Huang.

Quality Connections

Edali Industrial Corp., a specialized connector maker located in Tamshui, northern Taiwan, also says that there is no need to move its production base to low-cost areas, including China.

Sales Manager Harrison Yen says that, by way of example, a large recent order from a big U.S. computer buyer demonstrates "our competitive edge in a rather technology-intensive industrial line that is more quality- than price-oriented. Only those manufacturers who have been concentrating on the production of low-end items will feel the pressure to move their production bases to low-cost areas because their buyers purchase only cheaper products."

However, Yen continues, some of the 150-odd connector makers in Taiwan have shifted part or all of their production facilities to mainland China due to demands from their buyers to cut down logistics costs.

Although the aforementioned large order from the U.S. will keep Edali's plant operating at about 90% of production capacity through to the end of the year, Yen says that his company doesn't have plans to expand its capacity in Taiwan either. "Our operating margins, currently standing at around 17%-20%, must be improved somewhat before we can engage in any large-scale capital spending," Yen says. He expects that this time is not far off.

Established in 1991, Edali's product mix includes MMCX and MCX microwave connectors, 1.0/2.3 push & lock connectors, 1.6/5.6 telecom connectors, and BNC, TNC, FME, UHF, Mini-UHF, CATVF, PAL connectors. Its cable assemblies include RG174, 178, 179, 316, 316d and RG58 types.

Yen expects the company's turnover this year to top NT$140 million (about US$4.09 million at NT$34.20:US$1), up 40% from the NT$100 million recorded in 2002, the numbers buoyed by orders from the U.S. He also expects that Taiwan's quality connector makers will continue to enjoy booming business through the next five years thanks to the island's buoyant information-technology and telecommunications industries.

Aiming Higher With the Highest in Quality

Aimmet Industrial Co., Ltd., an ISO9001-certified RF connector maker, says its turnover in the first eight months of 2003 grew only about 2%-3% from a year earlier period, partly due to the outbreak of severe acute respiratory syndrome (SARS) in the second quarter.

However, management expects its revenue for the full year 2003 to expand around 5%-10% from last year, as the company is concentrating more on high-end connectors with higher added-value, says Marisa Chen, assistant manager at Aimmet.

The company has recently developed a new series of Fakra SMA connectors, which provide superior electrical performance in microwave applications. SMA connectors feature threaded coupling interfaces and 50 ohm impedance, and can be used in dividers, amplifiers, mixers, filters and attenuators.

To enable the company to keep abreast of the latest manufacturing trends, Aimmet has also recently signed a technology cooperation agreement with the Electrical Engineering Department of National Cheng Kung University in Tainan, southern Taiwan, Chen says.

With a workforce of 25 people, Aimmet focuses on connectors, plugs, and jacks for telecommunications devices, including mobile handsets and GPS (global position system). Utilizing a full suite of the best in precision measuring instruments, Aimmet's RF and microwave-connector series include BNC, FME, MCS, MMCX, UHF, mini UHF, RCA, PAL, SMA, TNC, 1.0/2.3, and 1.6/5.6.

Staying at Home

Yeong Chwen Industries Co., Ltd., another ISO9001-certified maker of terminals and connectors, reports that its sales in the first eight months of the year were flat in comparison to the same period a year earlier, partly due to a slowdown of orders from its European buyers. However, its existing stable of buyers are now rebuilding their inventories, which should help boost its annual turnover next year, says its export manager Peggy Wu.

Although prospects appear bright for local connector makers, Yeong Chwen doesn't have plans to expand its production capacity at its plant in Taiwan, or to move its production base to China, Wu says. "To commit ourselves to building a connector plant in China is not warranted at the moment, given that labor costs account for a mere 10% of overall production costs for the manufacture of connectors and terminals," she asserts.

Yeong Chwen's plant, located in Tucheng, northern Taiwan, currently employs 30 workers. Orders on hand will keep the plant operating at 70%-80% of its capacity until year-end.