A connector is a functional element that connects, disconnects, or converts a circuit or optical channel with the help of electrical or optical signals and mechanical force. As a node, the connector connects electrical systems, equipment, independent units, printed circuit boards, electronic devices, independently or together with cables. In the defense fields of aviation, aerospace, ships, weapons, complex weapon systems are inseparable from connectors.
The Global Connector Market Is Growing Steadily, And the Chinese Market Is Booming
The overall size of the connector market grows with the improvement of the level of social and economic development. Data show that the global connector scale has grown from 45.2 billion US dollars in 2010 to 72.4 billion US dollars in 2019, with a CAGR of 5.37%, and the overall market size is on the rise. The Asia-Pacific region is the largest connector market, accounting for 56% of the global market in 2019. As North America and Europe transfer factories and production activities to the Asia-Pacific region, the popularization of 5G communications, the rapid development of the new energy vehicle market, and the Internet of Things, where the connector market will continue to grow in the future.
In recent years, the global connector productivity has continuously shifted to China, and China's connector market has the largest scale in the world, and its growth rate has exceeded the global. With the shift of the industrial chain, foreign companies setting up factories in China, and the rapid growth of demand, the CAGR of China's connector market reached 19.34% from 2000 to 2010, experiencing a period of rapid growth; from 2010 to 2019, the CAGR of China's connector market reached 8.24 %, compared with the global market's growth rate of 5.37% in the same period, China's connector market still maintains a relatively rapid growth. The size of China's connector market in 2019 is approximately 22.1 billion US dollars, accounting for approximately 31% of the global market share. Driven by the rapid economic development, connector industries such as communications, computers, and consumer electronics are developing rapidly in China. It is expected that in 2020, driven by downstream demand, China's connector market is expected to maintain a relatively high growth rate.
High Barriers, Low-Cost Ratio, And Strong Bargaining Power in the Industry Chain
The connector is the key node of the entire system, and its transmission performance determines the transmission speed and transmission quality of the entire network. Fast transmission speed, low loss, and stable transmission are important electrical performance indicators of the connector. Connectors are often exposed to the external environment and need to be adapted to complex and harsh working environments. Connectors often need to be plugged and unplugged repeatedly, and they are prone to vibration, collision, and impact during use. Mechanical damage such as impact and drop must be able to withstand external forces. Under strict environmental adaptability and reliability requirements, connectors have become one of the electronic components with the highest failure rate, accounting for 40% to 50% of the total number of failure cases of electronic components. The connector has an important influence on the overall performance and reliability of the equipment, but relative to its importance, the connector accounts for a relatively low proportion of the total equipment cost. Therefore, technology and quality are the core criteria for downstream manufacturers to choose connectors, and connector companies have strong bargaining power.
High Industry Concentration, Obvious Oligopoly Pattern
The connector market has formed an oligopoly competition pattern. The world's top ten connector companies occupy more than 60% of the market. From the perspective of the domestic market, there are about 1,000 connector manufacturers in China, including about 300 foreign-invested companies and about 700 local manufacturing companies.
Wide Range of Downstream Application Scenarios in the Industry
From the perspective of downstream application areas of products, the three major business areas of the military industry, communications, and new energy vehicles are currently the main application markets.
The Demand for New Energy Vehicles Is Strong, And the Market for Automotive Connectors Is Large
The automotive field is the largest application market downstream of electrical connectors. Traditional cars use about 600-1000 electronic connectors, and new energy vehicles use about 800-1000 bicycles, which is much higher than the average level of traditional cars, and a large number of connector products are also used in supporting charging piles. The average price of a single new energy vehicle charging pile is 20,000 yuan, and the cost of the connector is about 3,500 yuan, and the value of the charging pile connector is relatively large. As the market enters the later stage of the new energy vehicle sales climb, market demand is huge. According to data, the automotive connector market reached 15.8 billion U.S. dollars in 2018, accounting for 23% of the global market, and it is currently the largest segmented field.
Accelerated 5G Base Station Construction, Driving A New Round of Growth in the Industry
Communication is the second largest application market for connectors. According to published data, the value of connectors used in communications and data transmission accounts for 21% of the entire connector market, making it the second-largest application market for electrical connectors. Connectors are an important part of communication equipment. The value of general communication equipment accounts for about 3-5%, while the value of some large-scale equipment accounts for more than 10%.
Army Building Requirements Drive Steady Growth in Military Products Business
Military connectors are necessary components for new high-performance weapons such as reconnaissance aircraft, missiles, and smart bombs. They are mainly used in high-tech fields such as aviation, aerospace, weapons, ships, and electronics. Defense expenditure is the basis for determining the boom of the military industry and the fundamental source of military enterprise performance. In 2019, China's military budget is 1.19 billion yuan, and expenditures on weapons and equipment continue to grow. According to the "Thirteenth Five-Year Plan" for military construction and development, the military must achieve mechanization by 2020, and major progress must be made in informatization construction. There is an urgent need to make up for shortcomings in national defense construction. As military expenditure continues to grow rapidly, the demand for weapon equipment upgrades is accelerated, and the military connector market will also expand rapidly. According to the industry layout statistics of the connector industry, the market size of China's military connectors in 2010 was only 4.016 billion yuan. It is estimated that the market size of domestic military connectors will reach 12.436 billion yuan by 2020. Since 2010 The compound growth rate is 10.8%. With the continuous improvement of military informatization and the acceleration of military modernization, the demand for a large number of new equipment is increasing, and the market scale of military connectors is expected to continue to expand.
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