WEST CHICAGO -- Price erosion of surface mount connectors during the past five years has been significant and painful, says Bishop and Associates.

The research firm cites as the main reason the migration of manufacturing to China. "There is no doubt that connector prices have been significantly influenced by the lower costs [of China]. The lower prices are a function of the lower manufacturing costs."

Once the manufacturing migration to China has “run its course” and China prices are fully implemented, connector prices will stabilize, Bishop said. "In effect, the China influence on lower prices is a one-time occurrence. That is, once China pricing is in the marketplace, connector prices stabilize and stop declining. Once the lower costs are passed along, it’s over. There is no more to give the OEMs."

Prices have begun to level, Bishop wrote. "We have already started to achieve connector price stability.  Feedback from the industry suggests that the 7-10% price erosion of the past few years has slowed to the historical norm of 3-4% price erosion."