Some connector prices will rise

Rising raw materials costs are putting pressure on margins for suppliers

By Gina Roos -- Purchasing, 8/7/2008 1:23:00 PM

Continued increases in costs for metals and resins are impacting the connector industry and will result in price hikes for some interconnect products.

"Raw materials cost is the biggest issue," says Mike O'Connell, director, product management for Molex in Lisle, Ill. While the biggest challenges continue to be for copper and gold pricing, which has significantly increased year on year, resins are quickly catching up, he says.

Molex recently announced 4-10% price increases for some products, effective July 1. The connector maker is also looking at additional price increases as customers' contracts expire. The company is also, in some cases, implementing copper or gold adders, with OEM customers so as prices increase, there will be a price change associated with it.

Raw materials prices have gone up significantly over the past few years and it doesn't look like it's going to end over the next 12-18 months, says Rob Poort, global business line director, commercial products, FCI Electronics in Etters, Pa.

Rising materials costs are also putting pressure on margins. "It's one of the biggest challenges in the connector industry with margins under pressure," says Poort.

FCI has not passed along general price increases over the past 12-18 months, although the company expects some price increases for certain product lines this year. The hikes will primarily impact parts with a higher gold content and those that don't allow for the use of alternative technologies.

To offset some of the cost increases, some OEMs are looking at plating alternatives such as palladium and nickel with a gold flash. Though palladium is an expensive metal, connector suppliers say that pricing is much more stable than gold.

Also see: Brace for an increase in connector prices