Domestic Connector Industry Sets Up M&A Tide

Faced with a customer's demand for a purchase, as well as the trend of the industry giants, domestic connector and cable industry set off a wave of consolidation, and even cross-border cooperation. Hon Hai (2317) connector department is actively locking up the mainland connector factory to prepare for mergers and acquisitions; mainland wire factory Lixin also came to Taiwan to launch the merger and acquisition case; after the merger of Wickham, the goal is to reach 10 billion yuan in revenue within three years.

The mainland mobile phone brands and consumer electronics products are increasingly expanding, and Taiwan's component parts factories have also begun to adjust their tactics. They have shifted from setting up factories in the mainland to finding partners directly. It is understood that, after independence, Hon Hai Connector Division is actively evaluating mergers and acquisitions of land-connectors and cable factories to facilitate rapid access to the mainland brand supply chain.

According to reports, the joint venture launched by Hon Hai's connector company is not aimed at expanding production capacity, but rather buying patented technology and customers. The connector factory stated that the priority of the mainland brand factories in selecting the supply chain is that of land-funded plants, Taiwan factories, and foreign factories. Therefore, it is best to quickly acquire the business of mobile phones and PCs of mainland brand factories. The best way is to merge the land-based plants that have become a climate. .

Hon Hai crosses the ocean to find the mainland connector factory, but Lixin, the mainland's largest wire plant, came to Taiwan to find Taiwan's connector automation technology. It is understood that at the time, Lixun purchased Xuande at a price of 6.5 yuan per share (pre-capitalization), which was a price-to-buy transaction. It can be seen that the connector industry is eager to integrate the connector factory.

After two years of rectification, Xuande turned profitable last year and drove Lisen’s triple jump, consolidating Xuande’s previous year’s revenue of RMB 3.1 billion (approximately NT$15.5 billion), and doubled to RMB4.6 billion (approximately NT$1 million) last year. RMB 23 billion) This year, it is estimated that it can exceed RMB 8 billion (approximately NT$ 40 billion).

Taiwan also has related industry mergers and acquisitions, and recently it has been represented by an agile merger of Viehan. Yuan Zhiding, chairman of Hongzhi, said that after the merger of Wyhan, Acer next year saw a revenue of 7 billion yuan, the two sides integrate the connector and cable business, expand the customer base, the next three years, the macro revenue is expected to reach 10 billion yuan.

Yuan Wan Ding said that the merger of cable factories is to provide more complete services. Currently, Wiehan's customers include Schneider Electric, a German continuous power system manufacturer, Japan's safety control plant, and Swiss elevator plant, which can accelerate the entry into the industrial control industry.

Connector makers stated that the current large global connected component manufacturers such as Delphi, Tyco, Hon Hai, Zheng Hao, and Lixun all have mastered the layout of connectors and cables at the same time. After the merger of Weihan, the company will follow up more mergers and acquisitions.