Brace for an increase in connector prices

By Gina Roos -- Purchasing, 3/26/2008 9:50:00 AM

Connector suppliers say it's likely that they will have to increase prices this year because of increased costs for precious metals and plastics.

"We continue to see rising raw materials costs most specifically for gold,” says Pete Krehbiel, president, connector products division, Molex Inc. in Lisle, Ill.. “We anticipate price increases this year due to rising costs for precious metals and resins." The last price hike implemented by Molex was last summer.

Tyco Electronics' Communications, Computer and Consumer Electronics (CC&CE) business unit implemented 5% price increases for some products in certain segments on Jan. 1. Additional price hikes are under evaluation.

Tyco has felt the impact of rising metal and oil prices. Gold is used in connectors and oil has impacted the price of plastics that Tyco also uses.

“We've been hit with some pretty good increases over the past several months and how this is going to impact us is a little tough to tell right now," says Jeff Brown, director of product management for the CC&CE business unit for Tyco in Harrisburg, Pa.

Brown says the biggest material cost impacts have been for palladium and gold, which are used heavily in the connector industry as plating materials. "Over the last few months we've been hit on multiple fronts with a lot of the raw materials we use," he says.

Despite having very focused programs in both manufacturing and engineering groups to reduce costs, Brown says it's getting more difficult to find ways to improve efficiencies and cost to offset those raw material price increases.