Celebrating our 12th consecutive year!
The 12th annual Fleck Connection Congress was held November 6-8,
2000, at the Paradise Point Resort in San Diego, California. The
event was sponsored by Fleck Research and Global Connections, divisions
of Global Connector Research Group.
The conference, which included five interconnect industry workshops,
was attended by over200 of the industry's senior executives.
This issue of the Fleck Report summarizes 16 of the pertinent issues
and topics addressed by the senior executives who were speakers
2000 FCC Speakers (Listed in Presentation sequence)
This year’s distinguished group of industry executives was composed
of the following speakers, listed in order of presentation:
- Fleck Research
"Our Connector World: Change, Change, ChangeAdjust
or Lose Out."
- Greg Johnson, vice president North America & Global Communications,
Tyco Electronics Group
"Tyco Electronics' Response to Today's Industry
- Warren Teissier, vice president strategic development, Flextronics
"Operations Management Solutions for the World's
Product Solution Companies."
- John Woodworth, general manager Interconnect Solutions Division,
"The Role of Innovation in the Connector Business."
- Robert Rodin, chairman & CEO, eConnections
"Future of Supply Chain Management."
- Thomas F. Hagan, president, Volex
"Find a Better Way Every Day."
- Bill Bender, strategic commodity manager, Cisco Systems
"Connecting at Cisco."
- William S. Jensen, president, Connection Systems, Packard Hughes
"Delphi Packard Electric Systems 101."
- Keith Newman, senior staff engineer, Sun Microsystems
"ASIC Packaging Road Map."
- Bruce Bernier, senior manager, wire & cable, Lucent Technologies
"Sourcing strategies: Wire/Cable and Cable
- Carmen K. Sidbury, technical staff, Lucent Technologies
"Fiber Optic Connectivity TrendsFrom
Products to Solutions."
- Po Yin Tse, staff component engineering, Nortel Networks
"The Critical Roles of Interconnect Suppliers."
- Michael A. Savage, senior vice president sales and marketing,
"Succeeding as a Second TierHow a Leading
German Company Did It."
- Bob Behrent, president, Bomar Interconnect
"David & Goliath."
- Ed Cady, market development engineering, FCI Electronics
"Changing Complexities Within High Speed Cable
- John Powers, vice president of regional markets, Crown Communications
"Outsourcing Dynamicsthe New Customers."
Summary of 16 Pertinent Issues & Topics
Only brief summaries of the 16 pertinent issues and topics presented
by the industry executives at FCC 2000 are presented below. Speakers
provided significant insight related to business, market, products,
manufacturing processes and technology.
Since remarks made during the respective speeches were, in many
cases, "off the record," only attendees at FCC were exposed
to this expanded data.
The 16 pertinent issues and topics are summarized below in the
same sequence as the speakers on the program.
Fleck Research Industry Review & Forecast
Fleck Research noted that the industry made significant advances
in nearly every sector of the world in 2000, with only Europe in
decline, at 3.9%below its 1999 figures. North America gained 10.4%,
Japan 14%, the Pacific Rim 15.5% and the rest of the world (ROW)
6%, contributing to a worldwide increase of 10.2% from $36 billion
in sales to just under $40 billion.
Among industry segments, the greatest advances were made in the
communication (16.9%), datacom (15.8%) and telecom (12.4%) industries,
The industry's driving forces were backplane systems, which registered
a 37.3% gain; fiber optic shelves and racks, at 31.1%, and backplanes,
at 24.3%. Connectors were up 9.5% and cable assemblies at 8.7%.
Fleck outlined 10 high-growth sectors responsible for driving positive
growth in the year 2000. These were fiber optics, optical backplanes,
backplane systems, electromechanical subsystems, high-speed connectors,
high-density connectors, CATV/broadband, wireless, telecom and datacom.
These accounted for $19.7 billion, or 44% of the industry.
For the year 2001, Fleck forecast the industry moving from $39.7
billion worldwide in 2000 to upwards of $43 billion, a gain of 9.1%.
Driving forces for 2001 include high-speed connectors, increasing
30.8% to $2.4 billion; fiber optics, up 25.4% to $5.5 billion, and
wireless, gaining 22.1% to $3.8 billion.
Further in the future, Fleck predicted that 10 high-growth sectors
will drive the connector industry to $88.9 billion by 2010. New
business models will be required in the industry, he concluded.
Tyco Electronics a Global Presence
Gregory C. Johnson, vice president for North America and Global
Communications at Tyco Electronics, identified several market dynamics
faced by the company, including "faster, cheaper and increasing
performance and value."
Manufacturers "almost have to have factories on wheels and
do as much as we can in one central location" to service the
far corners of the world, Johnson declared. His performance goals
included improving time to market, a "maniacally drive for
lower costs," investment in new product development and maintaining
of a nimble mode of operations.
"A global presence is a requisite for doing business today,"
Johnson pointed out. Succeeding in today's environment, he added,
also involves strong talent, a broad product offering, focus on
costs and financial strength.
Tyco Electronics can be divided into two sectors. The first is
non-connector-related product lines, such as transceivers, multiplexers,
relays, switches and sensors among others. The second sector is
composed of connectors, cable assemblies and backplanes, which will
reach $6.5 billion in 2000..
Flextronics Aggressive Acquisitions Key
The rapid success story of Flextronics from a ranking of
22 among contract electronics manufacturers in 1993 to number two
in 2000 was detailed by Warren Teissier, vice president of
strategic development for the $12 billion global EMS provider.
"We're not competing against other companies," Teissier
declared. "We're competing against time. And in this business,
it's not the big companies that eat the small, it's the fast companies
that eat the slow ones." The company now ranks only behind
Solectron among CEMs and is growing on the OEM-driven outsourcing
trend as well as aggressive acquisitions.
Flextronics, which has over 70,000 employees worldwide, operates
over 100 manufacturing sites in 27 countries with operations in
the Americas, Europe and Asia/Pacific. Its industrial park strategy
enables the lowest-cost manufacturing, Teissier noted.
"Our world-class capabilities have been proven to positively
impact time-to-market, reliability and cost," he continued,
pointing out that 40% of the company's revenue comes from products
impacted by Flextronics design. The company has over two million
square feet of manufacturing capacity and is expanding production
3M a Century of Diversification
Examining the role of innovation in the connector industry, 3M's
John Woodworth, general manager of the company's Interconnect Solutions
Division, pointed out that the company established as Minnesota
Mining and Manufacturing now is nearly a century old. The multibusiness
company is "knitted together by common platforms that provide
fundamental competitive advantage," he noted.
These platforms, Woodworth said, include shared world-class technology,
shared customers, channels and brands, shared global infrastructure
and a culture of innovation. 3M, he pointed out, possesses the unique
ability to create businesses with premium positions in a variety
A major change at 3M this year, he observed, was the March split
of 3M's Electronic Products Division into two separate divisions,
EPD and ISD (Interconnect Solutions Division). The latter unit includes
such product segments as board mount interconnect, wire mount interconnect,
cable, fiber optics, low-frequency interconnect assemblies and transmission
"3M's Interconnect Solutions Division" is committed to
developing a trusting and long-term relationship with our customers
that will be value and benefit-based," Woodworth stated, "delivering
point of access to multiple technology platforms and material solutions,
experienced global resources for solution design-in to maximize
customer productivity and market advantage, new and innovative product
platforms, highest reliability products and superior, industry-leading
3M has a major focus on advanced research, tracing back to the
development of TAB (tape automated bonding). Their innovation spans
Level 1 interconnections, high-speed connectors, fiber optics, burn-in
and test sockets, to name but a few..
eConnections Demand Mandates Innovation
"The challenge for everyone," declared Robert Rodin,
chairman and CEO of eConnections, "is to get the right product
to the right place in the right time in the most efficient way."
Rodin, who spoke on the future of supply chain management, identified
six forces at work in the industrythe network explosion, globalization,
the war for talent, product life cycles being super-compressed,
build to order and supply chain management.
"Acquisition are out of control," he said, "and
are being driven by the voice of the marketplace. The bar of the
customer's insatiable demand is being raised every minute."
The breakthrough idea, he stated, is designing for the supply chain.
Two products may look alike, but the supply chains that deliver
it are so different that the economic models are almost unrecognizable.
It is the supply chains, not the companies, which now are competing,
he noted. Rodin's eConnections optimizes by "moving, reducing
and eliminating steps for the industry," he declared. "These
are direct, authorized connections. eConnections doesn't touch parts
and never will," he said.
"Time is the currency of the future. When you minimize work,
you maximize time. You can measure the amount of time saved in the
amount of market share gained," Rodin stressed. "We all
must change; the market will demand we find ways to do it. Solutions
may not be easy, but as John Wooden (the UCLA basketball coaching
legend) said, failing to prepare is preparing to fail."
The connector industry is increasingly carrying out transactions
through the Internet. Rodin believes that 80% of all transactions
by the connector industry (engineering specifications, locating
specific products, selecting suppliers and placing orders) will
occur within three to five years..
Volex The World's Largest Independent CEM
Volex, according to its president, Thomas Hagan, is the largest
independent producer of electrical and electronic cable assemblies
in the world. The company provides global support to the world's
leading producers of data and telecommunication systems and builds
products for consumer electronics and appliances for transportation
and for defense, aerospace and industrial applications.
The company, headquartered in England, operates 30 manufacturing
plants and 30 sales offices in 19 countries around the world with
a total of 13,100 employees. In the United States, Volex is represented
in Massachusetts, Indiana, North Carolina, Arkansas and California.
"There are increased opportunities for global suppliers that
can create value," Hagan stated, noting that the pace of technological
change is increasing. "Products change early and often,"
he commented, and there is a large requirement for new product introduction
and design support.
Volex is involved in myriad industry segments, including power
products, wire harnesses, RF products, networking products and fiber
optics. Hagan declared that Volex will "continue to invest
in technologies and capacity, particularly RF and fiber optics,
that have the largest potential for growth."
Volex will produce nearly $500 million of electronic cable assemblies
in 2000, excluding power cords..
Cisco Systems Riding the "Tornado
"The Internet is changing every aspect of life, creating new
opportunities for business, and it's happening at unprecedented
speed," declared Bill Bender, Cisco Systems' strategic commodity
manager. "There are now 300 million Internet users worldwide
with over 3.2 billion Web addresses."
The e-commerce explosion, Bender noted, has just begun. The Internet
revolution is leveling the playing field between companies and countries
around the world. "It's not about the big beating the small,"
he emphasized. "It's about the fast beating the slow."
"At Cisco," he noted, "the Internet is at the center
of everything we do. Cisco's history is tightly linked to the rapid
growth of networking and the Internet." Bender pointed out
that Cisco went public in 1990 and has been one of the best-performing
stocks. "If you'd invested $1,000 in Cisco 10 years ago,"
he said, "you'd be a millionaire today."
Service providers have been the real "tornado markets"
of the past few months, Bender declared. "Cisco is very bullish
on its growth planswe may become a $50 billion company in
the next year or two." He noted that one of Cisco's highest
priorities is 0optical networking, which "dramatically changes
the economics of networking."
Cisco has become one of the top 10 OEM accounts for the connector
industry in 2000. Their purchases will be about $350 million..
Delphi/PHI A Presence in Every Region of
William S. Jensen, president of the Connection Systems division
of Packard Hughes Interconnect, traced the evolution of Delphi from
the creation of General Motors' Global Automotive Operations in
1988 to the company's eventual independence in 1999. The company,
he noted, is the world's largest and most diversified automotive
supplier which has its roots in the 1890 incorporating of the Packard
Electric Company, which led to the Packard automobile.
"Delphi is growing business outside of GM at a rate of 10%
per annum and has a presence in every region of the world with its
vast product portfolio," Jensen commented. He pointed out that
in 1999 Delphi booked $33 billion in new businessof which
$9 billion, or 27%, was with customers other than GM.
The company employs over 16,000 engineers, scientists and technicians
worldwide, with an engineering investment amounting to 6% of sales.
Delphi holds 5,500 worldwide patents and has 149 major products
under development for introduction this year and next. The total
worldwide employment is well over 430,000.
Delphi's 1999 sales revenues were divided among dynamics and propulsion
($14 billion), safety, thermal and electrical architecture ($10.3
billion) and electronics and mobile communications ($4.9 billion).
"Our connection systems are the linking technology to physically
integrate wiring, flexible circuits, switches, electronic products
and devices for complete power and signal distribution capabilities,"
Delphi, following the IPO last year, became a non-captive supplier,
competing just like any other manufacturer for the General Motors
car and truck divisions' business. As a result, Delphi, for the
first time, was counted as a non-captive supplier. Delphi, coupled
with PHI, became the number-four worldwide supplier in 2000, with
approximately $1.2 billion in worldwide revenues.
Sun Microsystems Rapidly Increasing Board
Keith Newman, a senior staff engineer at Sun Microsystems, outlined
his company's focus on ASIC products. "Most companies appreciate
our input because it's based on product needs, not marketing objectives,"
"The two main categories at Sun are density and performance,"
Newman stated. "Sun looks at products for density and performance
across all its product lines. There is intense competition. Our
largest competitors are Hewlett-Packard and IBM, which keep us on
our toes at all times."
Newman acknowledged that Sun "has been really slow in introducing
new products." The company lets its suppliers know as early
as possible what it's doing, and the maximum lead count trend steadily
"Sun has been undertaking studies for a number of years looking
at fine-pitch devices," he said. "We probably will use
some of these in memory applications." The company also is
looking at lead-free applications.
Sun Micro is one of the innovative technology leaders in next-generation
packaging. Newman outlined the basic elements of Sun's technology
road map, which specifies larger numbers of I/O, finer pitches and
Lucent Technologies An Emphasis on Communication
Bruce Bernier, senior manager for wire and cable at Lucent Technologies,
pointed out that Lucent is selling or spinning off other business
segments to place more emphasis on communications.
The company spun off its former Lucent Enterprise Network Group
to shareowners of Avaya in September and expects to sell its power
systems business by the end of December (editor's note: Tyco Electronics
acquired Lucent's Power Systems business in late November). By the
summer of 2001, Lucent expects to spin off its microelectronics
businessincluding the optoelectronics components and integrated
circuits divisionsinto a separate company that will be the
world's leading provider of communications semiconductors.
Bernier noted that Lucent is expected to reduce its supply base
by 50% in 2001 and create a cost-competitive and profitable business
in supplier alliances, sharing information "so that our alliance
partners know as much or more about our business as we do."
Lucent, Bernier declared, intends to migrate its wire/cable and
cable assembly business from a locally managed business to a globally
focused strategy that integrates the strategic suppliers into a
long-term relationship with the goal of creating value both for
the supplier and Lucent.
Lucent is among the top OEMs who purchase the highest dollar value
of connectors, cable assemblies and backplanes annually. In 2000,
total procurement will reach $1 billion..
Lucent Technologies Communications Fueling
the New Economy
"Communication fuels the new economy," declared Carmen
Sidbury of the Lucent Technologies' technical staff, pointing out
its applications in homes, buildings, computers, wireless, smart
cards, handheld devices, smart vending, entertainment devices, intelligent
transit and smart appliances.
She noted that with a self-reinforcing system driving exceptional
market and network growth, an efficient transport network infrastructure
is essential to keep pace. Network traffic and fiber capacity are
accelerating while costs continue to decrease.
"The global market forecast for fiber optic connectors is $1.4
billion in 2002, rising to $2.48 billion by 2005 and soaring to
over $5 billion by the year 2009," Sidbury commented. End users
must choose the best-performing connector in the marketplace, she
said, and cabling infrastructure is a 10 to 20-year investment that
will support multiple generations of electronics.
The market, Sidbury pointed out, is expanding and changing rapidly
and new designs must be available quickly. The optical component
market is sustaining a 40% to 70% of annual growth and will reach
$5 billion by the end of 2000 and approach $23 billion in 2004.
Lucent is one of the industry's innovators in fiber optics and
connectors. Examples are the ST and LC. In particular, the LC currently
is one of the hottest fiber-optic product lines. .
Nortel Networks External Manufacturers'
Nortel's Po Yin Tse emphasizes the role of the external manufacturer
(EM), noting that "our product success depends on superior
quality components on our product assemblies that are being manufactured
at our EM site. Support at our EM will serve a tremendous purpose
to ensure the success of our products in the market."
The EMs, Tse explained, are the contract electronics manufacturers
(CEMs) who are the other strong arms of OEMs. This segment of the
industry is projected to do $100 billion worth of business in the
worldwide electronic manufacturing market in 2000. They include
such companies as Solectron, Jabil Circuit, SCI Systems, C-MAC,
Sanmina, Celestica and Flextronics.
"The external manufacturer's input at the early R&D stage
is crucial," he stated. "A product life cycle is inversely
proportional to the frequency of involvement with the EM by the
suppliers." Communication, he noted, is essential among all
three stake holdersthe OEM, the supplier and the EM.
Special challenges to interconnect suppliers, Tse said, include
special process requirements at manufacturing, the availability
of insertion and extraction tools, product specification, and optimal
design layouts. Periodic meetings between the EM and the OEM are
crucial for sharing of ideas.
Nortel will purchase in the year 2000 about $275 million of connectors,
cable assemblies and backplanes..
ERNI Succeeding as a Second-tier Company
Although the subtitle of his presentation was "How a leading
German company did it," ERNI Components' Michael A. Savage,
senior vice president of sales and marketing, pointed out that ERNI's
roots are Swiss, not German, "though most people perceive us
as a German company."
ERNI, which is 100% privately owned, was started by Ernst Erni
in 1947 and became a DIN 41612 connector manufacturer in 1968. The
company now has three divisionsERNI Europe, ERNI Americas
and ERNI Asia. ERNI's growth has exceeded that of the industry itself
since 1992, with projections for growth of 90% against an industry
total of 10%.
"As a second-tier company, we can react faster to customers'
needs," Savage pointed out, "and we can focus on fewer
products and become product leaders. In our organization, company
leaders have more opportunity to wear more hats and gain broader
Savage stressed the concept of "co-opetition"the
behavior of business partners simultaneously working both with and
against each other. Some tenets of this philosophy are cooperation
to expand the market and competition for the largest share possible.
ERNI is the leading worldwide producer of DIN connectors, also
the market leader of backplanes in Europe and is rapidly becoming
one of the major suppliers of 2mm connectors. .
Bomar Interconnect A Small Company With
a Personal Touch
Bomar's president, Bob Behrent, entitled his presentation "David
and Goliath," casting his company in the role of the biblical
slingshot marksman, and outlining how Bomar succeeds in the land
of the giants. For one thing, he places a heavy emphasis on customer
service, two words that, in too many larger businesses, have become
"Out first few million dollars of sales were mostly linked
to the LAN data networking market," Behrent explained. "With
all the cheap junk on the market, we were able to compete by designing
several internal features into some of the products. We stocked
the product in quantity and developed a distributor network to supply
the products to local customers."
The key to Bomar's success, he explained, was marketing. "You
present yourself as any large company would," he noted. "Gate
crashers act like they belong, so they do. Dale Carnegie tells us
not to sell the steak, but to sell the sizzles. So we show our specialty
products and net designs first. Attention getters."
Behrent quipped that his company created a product line within
its standard line with part numbers beginning with the letters "EJ"which
stand for "economy junk," and it's marketed exactly that
way. It's sourced in Taiwan and "we say this is the best junk
on the market.".
FCI Electronics Changing Complexities in
Ed Cady, marketing development engineer at FCI Electronics, presented
a highly technical address on "changing complexities within
high-speed cable I/O." He noted that "high speed always
is a challenge, but now we have a new set of challenges to address."
"If you're going to be doing cable, you have to be a member
of a trade association to be successful," Cady stressed. "Cable,
connector and chip people all have to improve their quality and
work as a team."
The key to being successful in the industry, he believes, is working
together cooperatively. "You have to look at a lot of performance
issues and have cables and connectors certified by an outside independent
lab. If you're caught shipping products with a logo and no license,
you'd better have a good legal staff."
Cady pointed out that standards bodies such as Fiber Channel, Infiniband
and 10 Gigabit Ethernet are starting to work together, like "birds
of a feather." Since new and more costly testing equipment
is needed, companies now have to do their testing together. "Even
deep-pockets people have their challenges," he noted.
Cady defined the number of cable assembly designs that have been
introduced in the recent period, such as ATA 16, ATA 33, ATA 66,
ATA 100, ATA 150, ATA 300, ATA 600, Cat-6e, cLAN 1.25, cLAN 2.5,
D-Bay, DMicro 68, Dsub 9, FC 12.8, FC 40, FC 106, FC 202, FC 425,
FC 850, GbE 1000BaseT, GbE 100BaseCX, GbE 12.5, GBIC, GLM, HIPPI
6.4/10Gbs dual 68 VHDCI, HS9 D-sub, HSSDC-1, HSSDC-1e, HSSDC-2,
IB 2.5, IB 5.0, LDT, MicroGigaCN, MPO, Myrinet 1.28 GBs 40 VHDCI,
PC 52, PLX/PCI 64 dual 90 VHDCI, QuickRing 50 VHDCI, RapidIO, S/P
1.25, SCA-2, SCA-3, SCA-4, SCI-10 GBs dual 50p VHDCI, SCI-20 GBs
dual 50p VHDCI, SCSI 40, SCSI 80, SCSI 160, SCSI 320, SCSI 640,
Sebring Ring II PCI 32 Quad 68 VHDCI 4.2 GBs, ServerNet2 1.25, SFP-1,
SFP-2, VHDCI-1 and VHDCI-2.
Crown Communications Wireless Growth
to Triple in Five Years
Understanding the customer's business was the key to the address
by John Powers, vice president of regional markets for Crown Communications,
who spoke on "Outsourcing Dynamicsthe New Customers."
"Better, faster, cheaper" still applies, Powers declared.
Wireless will more than triple over the next five years, and much
greater capacity and overage will be needed. Traditional cellular
and cordless phones are merging into PCS, the "handheld identity."
"The Internet has created much more one-on-one interface,"
he pointed out. "It's created a whole new community. You need
to leverage the Internet to find the information you need. We're
seeing more integration and consolidation today, new players are
popping in because of the Internet."
Powers stressed the need to understand a customer's needs on a
regular basis and anticipate those needs from as many perspectives
as possible. "It's important that sales people identify the
true decision makers," he said. "Products must be made
smarter and easier to use."