Some positives among the COVID-19 gloom cannot disguise a hugely challenging year ahead for the UK connector industry

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• T&M, Medical, Mil/Aero and Comms sectors still positive
• Commodity prices and supply chain issues are challenging
• ITSA members revenues drop by 10% in Q1

May 19th 2020. It has taken just a little under three months to turn what had the real potential to be a positive 2020 for the UK electronics industry into one that has shaken every business to the core. The shutdown in China, for example, has had a significant effect on the supply chain while the dramatic changes in commodity prices will have an obvious impact on materials and manufacturing as well as incoming costs and outgoing prices.
“The result of these and other challenges has meant that ITSA (Interconnect Technology Suppliers Association) members have faced a difficult first quarter.” Says ITSA’s Chairman John Biggs. “And there can be no doubt that the UK connector industry has a particularly challenging year ahead.
“In terms of numbers, ITSA members saw revenues drop by 10% compared to the fourth quarter of 2019 but of more significance is that orders dropped by 14% giving a negative book to bill of 0.87:1 which will inevitably lead to lower revenues later in the year. Member’s distribution revenues dropped by 20% and this is likely to follow elsewhere in the market as we progress through 2020.
“We have witnessed dramatic effects on the price of commodities such as Oil, which dropped to the lowest level for 18 years and Gold, where prices have increased by between 5-8% depending on which quarter we compare it to in 2019. Prices for Silver have fallen by more than 15% since January while Copper has been at a 52-week low.” Adds Biggs

According to ITSA, several markets have continued to be buoyant. These include Test & Measurement, Mil/Aero and Medical. Not surprisingly, T&M and Medical have both been positively affected by the technology demands to combat COVID-19 while Mil/Aero is almost certainly due to the need to fulfil existing programmes.
The communications market is clearly being driven by 5G with members seeing 29% growth. The deployment of Fibre into networks continues at pace and ITSA members enjoyed a 45% increase in this product area with Q1 being the highest level for 8 years.

COVID-19 – ITSA member’s response

All members of ITSA have naturally had to adjust and adapt to the COVID-19 pandemic with varying degrees of severity according to John Biggs. Some members have had to furlough staff while others have taken the decision to keep their people on board either because of demand or with support from their parent company.
Many members also responded to the challenge and are involved in supporting the medical equipment needs of the NHS. This clearly shows the level of adaptability still apparent in the UK and the present urgent requirement for COVID-19 testing for example brings into sharp focus the need for localised capabilities on into the future.
“The government is predicting that the UK economy could shrink by over 5% but that it would bounce back by Q3 or Q4 2021. This seems somewhat optimistic.” Says John Biggs
“At the moment, it is common to think about the “New Norm” which will exist after the lockdown starts to be released. This will likely take many forms but for businesses it will be a case of how best to manage their activities in a World where the traditional face to face will not be the “Norm” for many months to come.” He concludes.

UK Design and Manufacture Secures Connector Supply Chain

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Cliff Electronics , the Redhill based manufacturer of connectors and test products delivers UK manufactured products to OEMs and global distributors from stock held in it its own factory. Thanks to its flexible UK based design and manufacturing facility the company is well placed to fulfill the demands of its customers and continues to grow and expand into new markets.

Cliff has over 40 years’ experience in supplying cost effective and high reliability connectors to OEMs and System Integrators around the world. Markets served include broadcast and professional audio, medical, industrial, building automation, video installations, instrumentation and test and measurement.

Key UK manufactured products include terminal posts, jack sockets and their market leading range of XLR footprint FeedThrough connectors.

Cliff terminal posts are widely used in audio, test and measurement and for connections on power supplies. Standard options include a choice of colours,
either two or three stud lengths and different terminations, various mounting hardware options, metal parts are nickel plated as standard with gold to special order and an antimagnetic no-nickel version of TP60 terminal is available. “Y” versions have either sealed top 4mm hole or can be supplied with a coloured bung.

Having manufactured professional quality industry standard ¼” Jack Sockets
since the beginnings of electronic music Cliff have a very extensive and reliable range. They are available for PCB or through-panel mounting and with a nylon or rugged metal threaded metal “nose” which offers secure connection of locking plugs and grounding to system chassis. The socket body is made from durable nylon for superior performance and in a variety of styles including, offset nose, vertical, mini and stackjack to facilitate panel design. A number of switching options are available for designers to incorporate into their systems.

Cliff’s market leading and fastest growing product range are their highly successful XLR-Format Feedthrough connectors offering a very wide range of audio, video and data connectivity in the industry standard 24mm diameter XLR connector panel cutout. The standard format offers designers simplified panel layout and manufacture and the FT Series offers true feed-through connection. This allows standard cabling to be used to connect at both front and rear, eliminating the need to solder or terminate the connections and simplifying and speeding up assembly.

Models in the Cliff FT range now include Firewire, HDMI A-A female to female and 50 & 75 ohm including 75 ohm 12 GHz gold plated BNC versions, USB2 A-to-B and B-to-A “gender change” sockets, high speed USB Type – C, USB3 to USB3 in all gender changing configurations – A-A, A-B and B-A. Also available are all popular data and Ethernet connectors including USB 2.0 and 3.0, LC and SC fibre (Duplex & Simplex), UTP and FTP RJ45s in both Cat6 and Cat5e (shielded and unshielded), Toslink, RCA Phono, dust caps and blanking plates.

Cliff FT connectors are available in plastic or rugged zinc/nickel XLR housings finished in nickel or black and may be front or rear mounted to control panels. The Firewire and HDMI models may be specified with an optional socket sealing cover to prevent the ingress of dust when not in use or when in transit.

John Hall, General Manager of Cliff Electronics, comments; “With our UK Design and Manufacturing we can respond to changing market requirements quickly and provide cost effective solutions for our customers. We have a huge range of connectivity solutions for a wide range of markets in stock ready for immediate dispatch and our customers can rely on direct shipping and our extensive global distribution network.”

ITSA reports that 2019 ends well for the UK connector industry

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2019 – ITSA Members posted 5% revenue growth over previous year
• 2019 – Highest revenue year since 2014
• 13% increase in distribution revenue stream

February 20. The European electronics market had what many have described as a “difficult” 2019 with only single digit growth, while the UK market fared marginally better. One of the many sectors that make up the UK marketplace, the connector industry, saw modest growth by the end of the year after a poor first half.
The first two quarters of 2019 saw connector revenues decline reflecting the weakness of the global economy and the high levels of uncertainty caused by Brexit. This according ITSA (Interconnect Technology Suppliers Association).
“It was also a reflection of UK companies adjusting their component inventories which many had built-up as a contingency against the possible consequences of Brexit” says John Biggs, Chairman of ITSA.
“In the second half of 2019, the UK connector sector stabilised as confidence returned to the market and key infrastructure projects were released.
“Against this backdrop our member companies saw a revenue growth of 5% over 2018 and enjoyed the highest revenue year since 2014. A key driver of this growth has been the increase in the distribution revenue stream which increased by 13% and now accounts for 37% of ITSA UK revenues” John Biggs adds.

Key market performance
There are several key markets for ITSA members including MIL/Aerospace, mass transportation and communications and these continue to perform in different ways. During last year, MIL/Aerospace showed a 5% decrease at component level but this was more than offset by an increase in Value Add. Despite project deferrals and Government cutbacks, this sector has continued to grow and remains a long-term focus for ITSA members.
The communications market has shown a gradual decline in revenues at component level as more and more companies focus on offering Value Add solutions. This can be seen clearly with members reporting an overall increase of 36% over 2018 but with 2019 posting the highest revenue level for Value Add since the formation of the association. Clear winners here are Fibre Optics which posted a 63% increase and RF which grew by 31%.
The mass transportation market has also grown significantly over the past five years and although members saw flat revenues in 2019 this is a very project driven market and revenue trends will continue to fluctuate.

All the above should have meant a positive 2019, however, bookings remained very weak and posted three consecutive quarters of negative book to bill ending the year at 0.93:1. This is again a reflection of organisation adjusting their demand and inventories in line with the market uncertainty.
The level of contraction being seen by ITSA members reflects well against the overall trend in UK manufacturing which has reportedly posted its weakest year for seven years