Strategic alliance of Taiwanese connector supplier

Author：danny / time：2019-03-23 / The number of clicks：869

Connector suppliers in Taiwan face various problems that impede the development of the connector industry. One of the major issues is a shortage of professional mold designers. Professional training and instruction for talent cultivation may take a great deal of manpower and resources. The process also  increases cost and may not necessarily guarantee professional qualifications in mold design. Major connector manufacturers have focused on their respective areas of specialization to avoid taking each other’s market share, thus alleviating competitive pressure. Yet, the monopoly of an enterprise in a certain area could prevent any breakthrough, which may suppress the progress of an enterprise as well as the industry. To solve these problems and improve the connector industry, Taiwanese connectors have proposed projects that push for strategic alliances and implement such plans accordingly.

Such strategic alliance has brought vigor to Taiwanese connector suppliers. The automotive connector sector for example, has recently attracted much attention. It accounts for 25% of the global connector market, which makes it the second largest application product. Also, Foxconn Technology Group merged with An Tec Electric System Co., Ltd., which used to be one of the four major manufacturers of automotive harnesses in Taiwan. Foxconn’s unexpected undertaking in the field of automotive harnesses brought energy as well as vitality to the market of automotive connectors. There are other examples like Plastron Co., Ltd., which has been supplying products to overseas car dealers through marketing channels; and Chant Sincere Co. Ltd., which plans to undertake automotive connectors as an original equipment manufacturer through the connection of its client METHIDE. Such initiative may lead to success in the automotive connector industry.

There is strategic alliance between Taiwan and mainland China. Taiwanese connector manufacturers have transferred 90% of their production to mainland China due to low labor cost. However, this entailed some risks. Foreign companies saw this advantage and gradually explored the Chinese market. Taiwanese producers were put under pressure and feared of becoming marginalized due to the entry of western companies in the market. Thus, Taiwanese connector manufactures should enhance their products in terms of technology and quality, while deciding on whether to advance or withdraw from the Chinese market.

The connector industry in Taiwan also has its own advantages. US-produced connectors are characterized by advanced technology, quality, and service, while those produced by Japanese manufacturers have innovative features and efficiency. Connectors produced by Taiwanese manufacturers are equally good and have relatively higher price-performance ratio, which is why Taiwanese connector suppliers can survive as long as they keep cultivating new markets.