Analysis of the Connector Industry: Deeply Benefiting from Automotive Electrification

1.1 Definition of Connectors
A connector generally refers to an electrical connector that connects two active devices to transmit current or signals. Connector components are components that integrate connectors with corresponding cables (including fiber optic cables, wires and cables, microwave coaxial cables, etc.) into corresponding circuit circuits to achieve signal connection and transmission between electronic devices. The circuits formed in electronic devices are mainly connected through cables or PCBs (printed circuit boards). Classified by transmission medium: electrical connectors, microwave RF connectors, optical connectors. Classified by downstream application scenarios: communication connectors, consumer electronic connectors, automotive connectors, and Industrial connectors.
1.2 Advantages and main functions of connectors
The connector provides a separable interface for two circuit subsystems, on the one hand, allowing maintenance or upgrading of components or subsystems without the need to modify the entire system; On the other hand, it improves the portability of components and the expansion ability of peripheral devices, making the design and production process more convenient and flexible. The different functions implemented by various types of connectors result in differences in design and manufacturing requirements for different types of connectors. Connector manufacturers are generally single manufacturers of electrical connectors, radio frequency connectors, or optical connectors. Foreign connector giants such as Tyco and Amphenol also have the ability to produce electrical connectors, radio frequency connectors, and optical connectors.
2. Analysis of Connector Market Space
2.1 Continuously Increasing Connector Market Scale
From 2016 to 2023, China's economy maintained sustained and rapid growth, and downstream markets for connectors such as communication, transportation, and consumer electronics also achieved rapid growth, directly driving a sharp increase in demand for connectors in China., From 2016 to 2023, the size of the connector market in China increased from $16.5 billion to $24.9 billion, with a compound annual growth rate of 10.84%. The China Commercial Industry Research Institute predicts that the market size of connectors in China will reach 29 billion US dollars by 2023. The global connector market is mainly distributed in five major regions, including China, Europe, North America, Japan, and other countries in the Asia Pacific region. However, as the world's manufacturing industry shifts to China, the focus of global connector production is gradually shifting to China.
2.2 Classification of connectors based on downstream scenarios
The automotive industry is the largest application scenario for connectors worldwide. Automotive connectors are mainly electrical connectors, but with the development of automotive intelligence and networking, in vehicle radio frequency connectors have also begun to be applied. The quality requirements for automotive connectors are relatively strict, and corresponding suppliers must obtain IATF16949 quality system certification. The communication field is the second largest application scenario for connectors worldwide. The connector products in this field are mostly customized products, while in the communication field, electrical connectors, microwave RF connectors, and optical connectors are used simultaneously. The rapid iteration of technology in the field of communication requires connector manufacturers to have product pre research capabilities in order to maintain the compatibility of connector technology with application scenarios. Consumer Electronic Connector products exhibit the characteristics of standardization and miniaturization. In addition, due to the increasing distance between internal signal pathways, the anti-interference demand for signals between them is also increasing. In order to reduce signal distortion and signal transmission delay, connector products need to achieve good signal shielding and reliable connection.
2.3 The high popularity of new energy vehicles has driven the continuous increase in connector scale
Against the backdrop of the country's vigorous development of new energy vehicles, major automobile manufacturers continue to increase their investment in new energy vehicles, and China's production of new energy vehicles has rapidly increased, providing momentum for the growth of new energy vehicle connectors. In 2023, the global sales of new energy vehicles reached 3.125 million units, with a compound growth rate of 34.85% from 2016 to 2023; The market size of new energy vehicle connectors in China in 2023 was 4.78 billion yuan, with a compound growth rate of 60.46% from 2014 to 2020. New energy vehicles contain different types of products such as entertainment, information transmission, power, and energy storage. Different modules have different performance requirements for connectors based on their application directions. Due to safety requirements in the automotive industry, the performance of new energy vehicle connectors focuses on electrical performance such as high voltage, high current, and anti-interference, and requires good mechanical performance such as long mechanical life and resistance to vibration and impact in dynamic working environments for a long time. Therefore, the development of new energy vehicles has synchronously increased the requirements for connector usage and performance.
The construction of 2.4 5G base stations is steadily advancing, and the demand for communication connectors is growing rapidly
China has built a total of 1.291 million 5G base stations. The Prospective Industry Research Institute predicts that telecom operators will build over 800000 5G base stations throughout 2021; By 2025, it is expected that the cumulative number of 5G base stations constructed will be approximately 5 million; By 2030, it is expected that the total number of new 5G macro base stations and small base stations will reach 10 million. The increase in the number of 5G base stations has brought broad growth space to the communication connector market, and communication connector enterprises are facing sustained development.