The global connector industry has formed a clear pattern of concentrated leadership. The top three enterprises account for half of the market share. Although the domestic connector industry has made considerable progress, its concentration level is still relatively low. Most listed enterprises have a scale of 10-20 billion yuan. Mergers and acquisitions, as the core means of external expansion growth, are the key path to promote industry consolidation and enhance competitiveness.
However, mergers and acquisitions are not merely a capital operation; they are a systematic project that requires strategic thinking, organizational support, risk management, and a comprehensive process of meticulous integration.
This article, based on successful practices both at home and abroad as well as the author’s own experience, explores how the domestic connector industry can achieve concentration improvement and industry progress through scientific mergers and acquisitions.
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The global connector industry
The oligarchic structure driven by mergers and acquisitions
The global connector market is valued at approximately 100 billion US dollars. The combined market share of the three major players, Tyco, Avnet, and Molex, exceeds 50%.
Among them, Amphenol’s revenue exceeded 23 billion US dollars in 2025. Its growth history can be regarded as a history of mergers and acquisitions – by continuously acquiring leading enterprises in specific fields, it expanded its product line and customer base, achieving a leapfrog development.
Tyco Electronics also achieved this transformation through mergers and acquisitions. It evolved from a traditional component manufacturer to a global leader in connection solutions.
These cases demonstrate that relying solely on internal growth is difficult to break through the scale bottleneck in a short period of time. Mergers are the necessary path for connector companies to achieve a significant leap in scale.
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The domestic connector industry
Has a fragmented scale and integration is urgently needed
There are approximately 30 connector listed companies in our country. However, only three companies, namely Longfeng Precision, Zhonghang Optoelectronics, and Shenzhen Leixun Precision, have annual revenues exceeding 10 billion. Half of the companies have annual revenues ranging from 1 billion to 2 billion. Compared with international giants, domestic enterprises not only differ significantly in size, but also have obvious gaps in terms of technological reserves, global layout, and customer resources.
In recent years, with the rapid development of fields such as downstream 5G, new energy, and consumer electronics, industry competition has intensified, low-end production capacity has become excessive, and mid-to-high-end products rely on imports. A reshuffle is inevitable. Enhancing industry concentration and cultivating local leading enterprises with global competitiveness have become urgent demands for industrial upgrading.
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Mergers and acquisitions are a systematic project
It requires the “Four Pillars” to provide support and protection
Mergers and acquisitions are not a one-off transaction; they involve the entire lifecycle management of strategy, organization, risk, and integration. Drawing on the “Four Pillars” system of China’s corporate merger and acquisition management, each step is indispensable.
(1) Mergers and Acquisitions Strategy Framework
Mergers and acquisitions must first address the questions of “why to merge and what to merge”. Enterprises need to establish an “operations command center” consisting of the decision-making level and experts, set clear strategic goals for the next 3-5 years, systematically assess their own resource capabilities, and plan the direction of mergers and acquisitions around their main business or related fields. At the same time, they need to accurately “profile” the potential targets – set valuation, scale, technology, customers, culture and other selection criteria to avoid blind decisions. When Zhucheng Technology evaluated Ruosen Electronics, it was precisely based on the strong synergy between its precise mold design and stamping capabilities and its own business that it made a decisive move.
(2) Mergers and Acquisitions Operating Organization System
Establish a complete organizational structure covering the entire process from strategic planning, project search, due diligence to integration, and clearly define the responsibilities and output results for each stage. Through the collaboration of professional teams and external consultants, achieve scientific decision-making, free the boss from mundane tasks, and enable them to focus on making key decisions.
(3) Mergers and Acquisitions Risk Control System
Risk runs through the entire process of a merger and acquisition, from strategic misjudgment, due diligence oversights to integration failures, there are always “traps” everywhere. Through a risk control mechanism composed of internal and external experts, multiple layers of checks and balances are implemented. In the due diligence process, not only financial and legal aspects should be examined, but also hidden risks such as technology, customers, and culture should be deeply explored.
(4) Mergers and Acquisitions Integration Management System
Integration is the true test of the success of a merger and acquisition. It is necessary to establish an integration steering committee, an integration office, and teams for each business line, formulate a detailed integration plan, and complete the contingency plan before the transaction is announced.
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Mergers and Acquisitions IntegrationTen “Rules of Conduct” Ensure Smooth Implementation
The integration stage is the most likely to lead to the loss of value. By following the following principles, the success rate can be significantly improved:
- Initiate as early as possible: The integration team should get involved during the due diligence stage, identify potential difficulties in advance, and formulate countermeasures.
- Establishing the system: Clearly integrate the organizational structure and processes to avoid confusion.
- Determine the integration model: Based on the characteristics of both parties, choose the absorption, independence, feedback or cooperation models. Avoid being condescending.
- Formulate a detailed plan: An actionable integration plan must be completed before the transaction is announced.
- Speedy victory: On the first day of the operation, the new organization and personnel arrangements were announced, quickly stabilizing the troops’ morale.
- Give priority to integrating sales and customers: Stabilizing core customers is a guarantee for cash flow, and at the same time, explore cross-selling opportunities.
- Comprehensive communication: Develop communication strategies for all stakeholders such as shareholders, employees, customers, and suppliers to address their concerns.
- Retain key talents: Quickly identify the candidates for core positions and, if necessary, offer retention incentives.
- Emphasize cultural integration: Through cultural research, design integration plans to avoid the situation of “two different skins”.
- Establish an evaluation and review mechanism: Conduct phased performance assessments to integrate results, summarize experiences and lessons learned, and continuously optimize.
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Practical Insights
Lessons Learned from the Merger of Zhucheng Technology and Ruosen Electronics
In the project of Zhucheng Technology’s acquisition of Ru Song Electronics in 2025, we strictly followed the aforementioned methodology.
Strategically, it was decided to strengthen the precision stamping and injection molding capabilities. A cross-departmental team was organized to conduct joint due diligence. The 100-day integration plan was completed before the business registration change. On the first day of the transaction, the new organizational structure and core team were announced. The chairman personally visited Ruosen to hold a meeting with the employees to stabilize their morale; the integration team immediately connected with customers to ensure a smooth transition of orders.
Thanks to the systematic management of mergers and acquisitions, Ruisong Electronics achieved performance growth that year and formed a significant synergy with the original business of Zhucheng, becoming a new growth pole for the company.
Conclusion
The domestic connector industry is currently in a critical period of integration and upgrading. Only by elevating mergers and acquisitions to a strategic level and integrating a systematic engineering mindset throughout the process can the “1 + 1 > 2” effect be achieved, promoting the increase in industry concentration and fostering more leading enterprises with international competitiveness.
Let us, with professionalism and craftsmanship, jointly promote the Chinese connector industry to embark on a new journey of high-quality development.