2021 could be a wild ride, so Electronic Connector Company’s president, Bernard J Gizzi, encourages connector buyers to talk to their suppliers early and often.
We can wrap up 2020 with many hashtags, but my favorite is #LOCKITUP. We need to close the door on 2020, lock it and discard the key. A year ago, most of us would not have predicted this calamity, not just for humanity but also for our industry.
There have been pockets of stronger performance, such as 5G rollout, defense and medical equipment, along with signs of stronger than usual design activity in upstart technologies like artificial intelligence and virtual/augmented reality.
However, most of us still got caught by material consumption reductions. Particularly hit hard was commercial air and industrial/energy, plus small to medium sized businesses. Nevertheless, we also know our industry is poised to grow year-on-year. In fact, according to forecasting firms QLResearch & Research Markets, the global electronic connector market will grow over six per cent CAGR from 2021 to 2026, with NA near five per cent and Asia topping 11 per cent.
So, what trends might emerge given 2020’s volatility coupled with 2021’s technology adaption?
Commercial air will bounce back, strengthening the circular connector market and leading to faster adoption of newer, lighter, rugged EN style connectors thanks to easy installation, contact spacing and durability.
Medical demand will remain high, driving a continued need for safety and reliability. This will continue to foster known brands with strong reputations for quality.
Some connector manufacturers will relocate facilities to more reliable locations, possibly closer to their customers. If Covid has done one thing, it has caused us to all ‘operate anywhere’. For example, a large connector manufacturer moving final assembly to Mexico v Asia, avoiding potential tariffs and supply chain delays for finished products.
Robotics, drones, 5G and IoT will use more surface mount lightweight connectors as consumers require more ‘at home’ cleaning technology and better ‘at home or work’ instant goods delivery services. Automotive electronics continues to accelerate giving rise to technologies such as USB-C, FAKRA and optical style connectors.
Mergers and acquisitions will likely double in 2021 given larger companies have been conserving cash, while smaller competitors are searching for working capital.
So, what does this mean for electronic connector buyers in 2021?
First, get a grip on your supply chain and forecasts because as hard as the downturn was, it can rise just as fast. You do not want to be your company’s revenue growth chokepoint because suppliers let you down. Order early and often.
Second, spend more time with your engineers to make sure multiple sources exist for key connectors and cable assemblies. Recently, a customer asked for help as its digital signal connector supplier had been bought and its deliveries forced six months of production delays and unhappy customers.
Lastly, increase your communications with your suppliers. Share more information on legacy, core and new product development. Bring them closer to your company’s data and decision making. Ask for help early.
2021 could be a wild ride: #2021SEATBELTSFASTENED.