Low-end, niche applications targeted

Makers leverage stable product performance and price advantage to keep mature lines buoyant amid competing technologies.

Suppliers of DVI and VGA connectors and cable assemblies in China remain optimistic about growth despite threat from HDMI, DisplayPort, USB and IEEE 1394. The majority is even predicting a postcrisis upturn in export value, albeit small at 5 percent, by year-end. Total shipments, however, are expected to decline by less than 10 percent thereafter. Even so, makers are confident of opportunities in lowend and niche applications, thanks to stable product performance and price advantage.

DVI is holding out despite the sharp decrease in the rollout of supported devices. The latter totaled 112 million units in 2007 but will dive to 3 million in 2011, based on In-Stat projections. In contrast, rivals HDMI- and DisplayPort enabled equipment are expected to have an annual growth rate surpassing 30 percent in the next one or two years. These deliver 1080p resolution and have no cable length limitations. Further enhancements will match new A/V formats.

VGA continues to be adopted in the telecom, medical, security and industrial computer sectors. Some suppliers predict USB will replace it, specifically in the PC and peripherals segments, in the next five to 10 years. At present, however, more than 50 percent of such devices being shipped worldwide employ the traditional interface.

Under efforts to expand markets, local enterprises are leveraging the country’s position as a major hub for these categories and strengthening it further. At present, China accounts for 20 to 30 percent of the total sold worldwide.

Makers are boosting their competitiveness to attract more orders. Reducing defect rates is one measure. To achieve this, some companies ensure adequate training for QC personnel and keep manufacturing processes up to standard. They allow third-party and customers’ inspections as well.

In addition to UL, CE, TUV and RoHS, suppliers plan to secure more international certification in the next one or two years for greater market penetration. Several are eyeing REACH. This, however, jacks up prices by 10 to 20 percent so it will be a gradual move toward full compliance for the majority. Shenzhen Mingyida Electronics Co. Ltd is among them, having obtained the approval for some products. It sends more than 70 percent of output to Europe and North America.

Makers now also focus on customization, deemphasizing inhouse R&D due to shrinking orders. The strategy keeps businesses afloat by assuring them of OEM and ODM orders. This is why over 80 percent of shipments are under such projects, with the share likely to increase in coming years. For a few, it is already at 100 percent. Some have introduced advanced equipment for modeling and processing to boost customization capability.

Services are being enhanced as well. Several suppliers are lowering or doing away with minimum order requirements and shortening delivery time. The last they are undertaking despite a labor shortage, trying to meet a 10 or even seven-day turnaround. Companies are also intensifying marketing efforts, with many planning to attend trade exhibitions to broaden client rosters. Others intend to set up offices overseas. Online promotion is increasingly regarded as another platform to boost sales.

Products

The selection of DVI connectors in China consists of male and female models with 18+1 or +5 and 24+1 or +5 pins. The products have gold or nickel plating.

DVI-I and DVI-D configurations are available. The latter dominates supply because it meets basic requirements in most applications, especially A/V. DVI-I units are more versatile as they can support both analog and digital signals but are higher-priced. For this reason, only a few makers offer the variant, which accounts for 20 to 30 percent of total shipments.

Mainstream DVI cable assemblies have 26, 28 and 30AWG wires and shield or nylon weave. These come in 1, 1.8, 3 and 5mm and custom lengths. The best-sellers are DVI-to-DVI and DVI-to-HDMI models because of their broad use in PCs, DVD players, set-top boxes and other A/V equipment. More than half of the suppliers outsource the connectors from domestic and foreign companies.

Typical VGA connectors are in male and female types with nickel or gold plating, and phosphor bronze and UL94V-0-rated contact and insulation materials. Products from the majority of enterprises meet RoHS requirements, and some comply with REACH.

VGA cable assemblies have 16 to 30AWG wires and are available in 1.5, 1.8, 2 and 3mm and custom lengths. The popular kinds are male and female units with nickel plating, 24AWG wires, and 1.5 or 1.8m cables. Models with a VGA plug on one end and an HDMI or USB counterpart on the other are also available. Shenzhen Mingyida offers such varieties.

The key materials used are copper, nickel, gold and plastic. Most are obtained locally unless specified by customers. The supply is stable.

Costs are anticipated to become steady after rising by 10 to 20 percent last year. The latter development forced the majority of makers to increase prices but only by 5 percent due to competition. Others in the DVI category kept them flat or quit the line altogether, citing narrowing margins.