World Cable Assembly Market: Shifting Industry Market Structure
By John C. Colwell, Bishop & Associates Inc. 

Traditionally regarded as mature and stable, the cable assembly manufacturing industry may be poised for significant change through the remainder of the decade. Excluding automotive harnesses, the cable assembly industry is valued at approximately $70 billion in 2006, including captive and OEM in-plant cable assembly manufacture.

Value of Connector Shipments by Cable Assembly Channel of Manufacture

Source: Bishop & Associates Inc.

The value of connector factory shipments to the cable assembly industry, excluding automotive, was estimated at $10.4 billion in 2006, with a five-year CAGR of nine percent. In 2006, total shipments to automotive cable and harness assembly manufacturers accounted for an additional $4.5 billion in connector factory shipments. Thus, developments in the cable assembly arena are of prime importance to the connector manufacturing, distribution, and specifying communities.

Among the 13 manufacturing channels identified, connector companies that manufacture cable assemblies represent one of the fastest-growing segments. There are several reasons for this. First, at the onset of globalization, connector companies, particularly the larger ones, had both the vision and the resources to venture offshore. Today, most connector companies are exceptionally well deployed geographically. As such, leveraging manufacturing efficiency, local presence, and a global customer base to also manufacture cable assemblies, became a natural strategy.

Technical efficiency is the second reason for the success of the connector companies and, to a lesser extent, the specialty cable manufacturers. Insatiable demand for higher bandwidth, particularly in the computer, telecom, and military-aerospace industries, is pushing the speed-performance envelope for both cable assemblies and backplanes. Designing a high-speed serial I/O cable assembly involves a thorough understanding of transmission line physics, including characteristic impedance and S-parameter modeling. In addition, the designer will typically work collaboratively with one or more transceiver manufacturers. In the end, the product is not simply a cable assembly; it is the complete transmission link consisting of transceiver, I/O connector, cable assembly, I/O connector, and transceiver, each having carefully matched transmission characteristics.

The third is the ability of the connector companies to leverage their global market reach. The ability to provide project coordination across industry sectors and across geographic regions adds value at every point in the supply chain. An example would be providing the cable interfaces for all Detroit-manufactured automobile models A, B, and C, and, all cell phones produced in China by manufacturers X, Y, and Z.

The other high-growth segment is the niche market supplier who leverages special industry knowledge and, in many instances, unique process technologies, in order to dominate in limited focus markets such as medical, mil-aero, and industrial controls. We expect that the medical market for connectors and cable assemblies will remain custom and somewhat specialized. However, in the mil-aero and industrial sectors, COTS and industry standardization could result in the commoditization of cable assembly manufacture.

In the medical electronics market for cable assemblies, we also see the niche suppliers increasingly going head-to-head with specialty cable manufacturers. In the past, the niche suppliers worked collaboratively with the specialty cable manufacturers on engineered cable assembly solutions for the medical industry. This is particularly true of cable assemblies that are broadly classified as patient cables. These include ECG, ICU/CCU monitoring cables, blood pressure monitors, oxymeters, ultrasound imaging transducer cables, and similar medical cable assembly types. Many of these applications require highly specialized cable constructions for various reasons, including micro-miniaturization, high flexibility, high-flex-life, low microphonic noise levels, hypo-allergenic materials, and immunity to gamma rays, autoclaving, and the sterilant, ethylene oxide (EtO).

For more information regarding the evolving cable assembly market for connectors, visit www.connectorindustry.com. The recently published Bishop Industry Research Report No. P-625-07, World Cable Assembly Market for Connectors, is now available.

John Colwell Director, Telecom, Medical and Instrumentation, Bishop & Associates Inc. John Colwell’s background includes 10 years at Nortel Networks‑Cable Group, where he directed the U.S. premises cable marketing effort. In addition, Colwell directed Nortel's global product development group. Prior to joining Nortel, Colwell held positions in engineering, business planning and development at Amphenol Corporation.