Automotive

The Automotive Market: On the Road Again!
After a tumultuous 2009, the automotive market made a big comeback in 2010. Worldwide production in 2010 is projected to be approximately 70 million light vehicles, a 21% increase over 2009. Impressively, this comeback occurred during very weak economic times, tight credit, and high unemployment in the Western economies.

The worldwide automotive cable assembly market grew 23.5% in 2010, with a year-end value of approximately $26 billion. The average worldwide interconnect content is approximately $400 per vehicle.

A lot of things went right in 2010. GM, Chrysler, and Lear Corporation all came out of bankruptcy. GM, which received a $50 billion bailout from the U.S. government in 2009, re-entered the stock market and is poised to repay its debt ahead of schedule. Ford, who had been losing money and was restructuring before the downturn, turned a profit of $4.6 billion on automotive revenues of $51.8 billion for the first nine months of 2010.

Some things went away in 2010. The Pontiac brand was retired. Volvo, owned by Ford, was sold to Zhejiang Geely Holding, China’s largest private automobile manufacturer.

From a connector and cabling perspective, there are some interesting trends occurring in the automotive world. More electronics are being added into high-end and mid-class vehicles; infotainment systems, collision avoidance systems, and rear-view cameras are becoming standard. The number of electric and hybrid vehicles has increased. In short, the amount of interconnect in automobiles is increasing. Let’s take a look at some trends that will impact the interconnect market in 2011 and beyond. more

Automotive Infotainment Systems: Connecting High Bandwidth Data
The automotive industry is under pressure to accommodate the integration of consumer products, as well as respond to the drivers’ capabilities of processing higher data content. These networking requirements can be met with fiber optic, copper, and coax-based systems. more

Automotive Alternative Power Systems:
Requirements for Next-Generation Connectors  
There is widespread consensus that internal combustion engines, although continuing to improve, will eventually be replaced by electric drives. The timing for the substitution depends on political motivations and actions, as well as the comparative cost/performance curve of electric drives vs. internal combustion systems. more

Fiber Optics in Automotive Applications
Fiber optic cabling has been used extensively in telecommunication and networking applications, but in the automotive world, it’s still in its infancy, as is networking within the vehicle. Delphi’s experts shed some light on the complexities of this promising technology. more

The 2009-2010 Automotive Market:
A Year of Turmoil, a Year of Recovery?
by Dave Pheteplace
January, 2010 -- It has been a wild ride for the automotive market, First, the acceleration period: Year-over-year sales just kept growing. The variety and cost of the vehicles expanded, and the cable assembly suppliers thrived. U.S. auto sales surpassed 16 million vehicles in 2007, and the average American household owned more than two vehicles. But in 2009, the structure crashed. The auto business we knew in the U.S. was gone. After the mortgage crisis of 2008, no one could get loans, including the automakers. GM and Chrysler went bankrupt. Lear Corporation went bankrupt. In late 2009, China surpassed the U.S. as the largest car market in the world.

At the same time, the skyrocketing cost of oil and gas, and the push for greener technologies in cars, was solidifying the future of hybrid, electric, and alternative energy vehicles. This appears to be the future of the auto industry. What are the highs and lows of the last two years? What opportunities and challenges do these new vehicles bring? And, most importantly, where is this market going? more

Delphi Weighs in on Hybrids and Electric Cars
by Randy Sumner, Delphi Automotive
January 2010 -- Hybrid technology is the key for automakers to meet legislation requirements for fuel economy and CO2 emissions. Consumers are looking to hybrid and electric vehicle technology to lessen the environmental impact their cars have on the planet. As a result, we are witnessing an increasing demand for these types of alternative vehicles around the world. Randy Sumner, director of global hybrid vehicle development at Delphi, takes a look at the unique challenges for electrical interconnect technology in these vehicles. more

Delphi’s Interconnect System for Hybrids
January 2010 - Delphi has developed a unique interconnect system for hybrids. The following are the major components in their system. more

Computer/Peripheral

The Computer and Peripheral Market for Cable Assemblies: The Need for Speed The 2010 market for computer and peripheral cable assemblies recovered significant ground over the prior year as economies worldwide improved. Home users had a bit more discretionary income to put toward PCs and printers. Business users also opened up their checkbooks to catch up from two years of frugal spending. The migration from desktop machines to laptops and mobile computers continued in 2010. Worldwide PC sales were just over 350 million units in 2010. Desktop sales have been flat over the last five years, while mobile computers have been growing at a 20+% compound annual growth rate. Nearly one of two computers sold today is mobile, and that does not include media tablets such as the iPad. The advent of 64-bit, multi-core processors has also upped the need for high speed I/O ports on PCs. USB 3.0 can operate at 5 Gb/s. Its predecessor, USB 2.0, only operated at 480 Mb/s. Thunderbolt, a collaboration between Intel and Apple, can operate at 10 Gb/s. These ports support high-performance data device and high-resolution monitors. They allow the transfer of large amounts of data, such as large video files. Think of IPTV and file capture/display storage applications as examples. High-speed interconnects are also key to higher-end computing equipment. Server farms and data centers need high-speed I/O connections to handle the massive amounts of information they process, store, and share. Small form factor assemblies have been the choice for these I/O ports, both in optical and copper solutions. SFP/SFP+ is a 10 Gb/s system and QSFP/QSFP+ is a 25 Gb/s solution. The next generation is shooting for 100 Gb/s transfer rates. Not surprisingly, this is also the goal of the cell phone infrastructure. The computer and peripheral market is driven by the Internet and the availability of massive amounts of online information. The public continues to buy faster processors, larger storage devices, and bigger displays so that they can keep up with the explosion of data — and “the Jones’s.” The worldwide market for computer/peripheral cable assemblies increased 30% in 2010, to $20.2 billion, after declining 15% in 2009. But there are many factors weighing on this market in 2011. The worldwide economy is still unsettled, credit is tight, and consumers are careful with their purchases. Price competition among manufacturers also remains intense, and that includes the cable assembly manufacturers. The market in 2011, for these reasons, can expect more modest growth. more High Speed I/O Connection with Small Form Factor As the amount of data we are pushing through the Internet increases, the infrastructure we rely on needs to have the bandwidth and speed to handle it. Small form factor connectors and assemblies, both copper and fiber, have been the evolving solution to the problem. The following is a discussion with Joe Dambach, Molex’s expert on QSFP+. more Intel Thunderbolt Ups the I/O Ante Thunderbolt, the new Intel I/O connection on steroids. more

Consumer

The Consumer Market for Cable Assemblies:
Tough Times for Consumers
The consumer cable assembly market grew 30% in 2010, to $5.9 billion, after declining 21.4% in 2009. The consumer market is running into strong headwinds in 2011. The companies that Bishop tracks in this market segment grew an average of 2.9% in the first half of 2011 over the first half of 2010, and the combined net income was a negative 1.1%. The first quarter year-over-year growth was weaker, at 2.1%, than the second quarter, at 3.6%. In year-over-year sales performance for the first half of 2011, Sony was down 4.9%, Harman International was up 16.5%, Kodak declined 19.8%, Panasonic grew 2.6%, Whirlpool was up 3.7%, Tandy was down 2.3%, Philips declined 4.4%, Samsung grew 13.4%, and LG declined 11.3%. Nintendo’s sales were down 29.3%, to $12.2 billion for their fiscal 2011, which ended March 31, 2011, and their first quarter sales results were down 50.2% over prior year. Why the poor results in this market sector?

Of the 13 market sectors that Bishop tracks, nine of the sectors grew in double digits. Four sectors had mid-to low-single-digit growth, including military/aerospace, computer peripherals, medical, and consumer. Consumer had the lowest growth of the four. Year-over-year growth has declined every quarter, except one, since its high of 29.1% in the first quarter of 2010.

Rack up the poor results to the struggling economies of the world. The consumer market includes entertainment electronics, such as TVs, games, and music players; home electronics, such as exercise equipment; consumer electronics, including major appliances; and personal electronics, such as hair dryers. In tough times, these are items that consumers can do without. They are often purchased with disposable income, and there is not as much of that to go around today. more

Smart Appliances Require Intelligent Interconnect
Once upon a time, consumers were pleased with labor-saving devices that simply did their job as advertised. But today, fueled in part by the do-everything smartphone, smart appliances are communicating with us, fixing themselves, and performing tasks that not long ago seemed the stuff of sci-fi. And it’s all powered by intelligent interconnect products.

General Market

The Future of Wire Harness Production
Labor costs, logistics, and quality concerns are tipping the scales toward full automation of manufacturing wire harnesses. more

The Cable Assembly Supply Channel - A Shifting Landscape
Cable assemblies are an essential ingredient to most electronic manufacturers. Where have they come from, past and present? more

The Past, Present, and Future Performance of the Interconnect Industry
A presentation by David Pheteplace of Bishop & Associates at the WHMA 2010 Annual Conference in Orlando, Florida February 24-26, 2010.
March 2010 - 2009 was a difficult year for the connector industry. Connector sales plunged 21.8 percent, losing almost $10 billion in market value. The cable assembly industry worldwide lost $30 billion in market value. This was the fifth time in the last 30 years that the industry has experienced declining sales. However, this narrow and negative assessment discounts the bigger picture. The more defining issue is how well the industry has done in this time period. Connector sales quadrupled from 1980 to 2008, and this has become one of the most profitable industries, surpassed only by more visible industries such as pharmaceuticals, software, medical devices, and defense.

There are over 1,000 connector companies worldwide, with half of those residing in the U.S., Taiwan, and China. The top 10 companies comprise nearly 55 percent of the market. How do so many companies not only manage to survive, but thrive? more

Serving a Diverse Industry
The Wire Harness Manufacturing Association
March 2010 - The WHMA was founded in 1993. It is the only trade association focused solely on the manufacturers of cable and harness assemblies in North America. The purpose of the organization is to connect its members with resources and information that will help them navigate their businesses in this highly competitive market.

The WHMA holds an annual conference which brings its members together to share information. This year, the speakers included Barry Fason, retired Delphi executive (“Navigating the Bumps in the Road—Starting Now!); David Pheteplace, Bishop & Associates (“The Past, Present, and Future of the Connector and Cable Assembly Industries”); Brian Hirt, Industrial Electric Wire and Cable (“Economic Trends in Our Industry”); Christy Herig, Solar Electric Power Association (“Solar Power and the Connector Industry”); and J. Scot Sharland, Automotive Industry Action Group (“Auto Connector, Wire, and Cable Assembly Industry Challenges”). Members also joined roundtable discussions about best practices in strategic planning processes, profitability enhancement, industry benchmarking, industry market research, and independent rep sales vs. direct sales.

Lyle Fahning is the current chairman of the WHMA and the vice chairman of Technical Services for Electronics Inc. of Arlington, Minn. We talked to Lyle about the WHMA and the role it plays in our changing industry. more

The Right Tools for the Job
Modern Software Tools Help Accelerate Wire Harness Development
March 2010 - There has been a lot of discussion about how electrical systems design tools can streamline wire harness development to reduce lead times and cut costs for automotive and aerospace OEMs. However, other industries, such as specialized vehicle manufacturing, agriculture, off-highway, construction machinery, and the wire harness makers themselves, have some of the same problems and goals. Today, many of these companies create their electrical systems and wire harness designs using basic drawing packages. Although they do manufacture as many variants as the major automotive and aerospace OEMs, their complexity issues are still very demanding. Here are some ideas for these manufacturers to gain significant productivity and quality improvements in their electrical design process by using dedicated electrical design and manufacturing software tools. more

Industrial

Medical

The Medical Market for Cable Assemblies:
Critical Care for a Critical Industry
February 2010 - The economic realities that swept across the interconnect landscape in 2009 did not spare any of the market segments, including medical. The struggling economy had already hit healthcare hard in the last half of 2008. Many hospitals were losing money. They cut staffing and delayed equipment purchases. At the same time, U.S. workers were being laid off in record numbers. Many of the newly unemployed had reduced health insurance or none at all, which exacerbated the pressure on the medical device market as hospitals cut back. These trends continued throughout 2009.

The situation wasn’t unique to the U.S.: The worldwide market for medical cable assemblies declined 18.2 percent in 2009, to $2.6 billion, after growing 5.7 percent in 2008. Many factors continue to affect the market coming into 2010. Healthcare legislation is working its way through the U.S. congress. Worldwide, the population of people over 60 is growing, as are their medical bills. Governments around the world are grappling with the effects of the recession, including high unemployment. However, 2010 will be an interesting year in which the worldwide economy will pivot and form the basis for a recovery. Let’s look at some trends that will impact the medical cable assembly market, and see what we can expect from 2010. more