Source: Harness World/Bishop&Associates
In the last 20 years of the 20th century (1980-2000), the connector industry achieved a compound annual growth rate (CAGR) of 7.1%. Sales have only decreased for two years: in 1985, the industry decreased by -2.7%, and in 1992, the industry decreased by -2.1%.
In the first 20 years of the 21st century (from 2000 to 2020), the compound annual growth rate of the connector industry was only 2.9%. There have been seven years of sales decline: sales decreased by -18.8% in 2001, decreased by -6.9% in 2002, decreased by -21.8% in 2009, decreased by -2.7% in 2012, decreased by -6.1% in 2015, decreased by -3.8% in 2019, and decreased by -2.2% in 2020.
The first 20 years of the 21st century were a challenge. We spent one year and nine months (21 months) under the protection of the global COVID-19 pandemic. We have also experienced the bursting of the Dot-com bubble, the attack on the United States on September 11, the outbreak of various other global health epidemics, and the devastating financial and housing crises.
Analysis of the Reasons for the Decline in Sales in the 21st Century
The connector industry achieved a compound annual growth rate of 7.1% between 1980 and 2000, consolidating its reputation as a growth market. Between 2000 and 2020, the compound annual growth rate decreased to 2.9%, mainly due to the aforementioned issues.
Other significant changes during this period included the transfer of jobs and manufacturing to China, which began a widespread connector price erosion that lasted for many years. The explosive expansion of the Internet and the globalization of the world market have also affected the demand for connectors.
The following table shows the sales performance of the top 10 connector companies in the 21st century. (2000-2020)
The main findings from the above table are:
Amphenol's performance is significantly better than that of the connector industry, achieving a 20 year compound annual growth rate of 10.4%, while the industry's compound annual growth rate during the same period was 2.9%. This astonishing performance is the result of the company's proactive acquisition strategy.
Molex, Aptiv, FIT, Yazaki, Hirose Electric, and JAE outperformed industry performance, while J.S.T. performed weakly.
It is worth noting that during this period, TE Connectivity spun off multiple business units to focus more on the connector market in high-speed and harsh environments. This includes divesting an important part of its network connectivity business to CommScope in 2015.
Market share of top 10 connector manufacturers
Amphenol accounted for 2.9% of the global connector market in 2000. In 2020, Amphenol's market share will reach 11