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Two of the biggest issues impacting pushbutton switch manufacturers today include uncertainty in the global market and rising materials costs. The good news for buyers is that prices are stable and leadtimes are in the six to twelve week range. The bad news is that there are mixed opinions on where prices are headed next year.
The biggest challenge across the industry is the weak economy, according to Harald Kautz, global product manager for switches and connectors for CIS at TE Connectivity. "It's very weak in EMEA (Europe, Middle East and Africa), slightly increasing in the U.S., and stable in Asia Pacific."
However, price pressure is also a big challenge. "Price pressure is affecting margins and is the reason behind cost reductions," said Kautz. "It affects everything – resins, metals, plating materials, and processes."
As a result, switch manufacturers are starting to use more common resin materials across product lines and selective plating. They are also looking to reduce plating thicknesses and find alternative materials.
TE Connectivity is opting for what it calls “mass customization.” The company makes more generic use of plastic resins across all product lines in order to gain more buying clout with its suppliers. "We're reducing our costs by increasing our buying power," said Micheal Wilbourn, product manager, North America, for TE Connectivity, in Harrisburg, Pa. The company is also consolidating its base metal purchases to reduce costs.
"What we normally look into is the switch's application and performance needs," noted Kautz. "We're not simply making a decision to reduce plating or change materials plating; it is always a case-by-case scenario."
"We would not want to do anything that would adversely affect any existing product. It may be a case where we would offer an economy switch where the application only needs, for example, 1,000 or 2,000 electrical life cycles," Wilbourn added.
Integrating manufacturing facilities is another way switch manufacturers are reducing costs. C&K Components, for example, is in the midst of consolidating all of its manufacturing in China.
"The biggest challenge consistently is keeping costs down," said Kyle Peterson, worldwide product line manager, C&K Components, in Phoenix, Ariz. "The cost of precious metals – gold and silver – and labor in China continue to rise and we continue to battle these costs. It's becoming a struggle to keep up and we're constantly chasing ways to keep cost where the market wants it to be."
"Price pressure is affecting margins and is the reason behind cost reductions. It affects everything – resins, metals, plating materials, and processes," said Harald Kautz, global product manager for switches and connectors, CIS, at TE Connectivity. Peterson said that despite rising labor costs in China, consolidation will allow the company to reduce costs because the company will be more vertically integrated and use more automation. "We can be more efficient in our output per hour, which will keep our overhead and costs down," he said.
C&K also plans to consolidate its materials purchases across several lines. "We're trying to use more of certain plastics, and integrate them across all lines, so we can consolidate our buying practices. It allows us to buy more of one material, and pass the savings across all of our lines," Peterson noted.
Thanks to some of these cost reduction strategies, switch manufacturers have been able to maintain stable pricing for pushbutton switches. Most do not see any factors that will drive up prices next year. However, precious metals have had the biggest materials impact on the price of pushbuttons over the previous two years, and if costs start to rise again, all bets are off in terms of stable pricing in 2013.
Still, buyers expect price reductions due to lower demand and more manufacturers targeting the same customers, according to Kautz. He expects prices to fall between 3-5 percent in EMEA this year for pushbutton switches.
However, Wilbourn does not see the same pricing trends in the U.S. In fact, prices have increased for some product lines this year because of materials costs. C&K also had to increase prices by 3-4 percent across all product lines, including pushbuttons, to keep up with rising materials costs. "Gold drives a lot of the cost on the internal contacts of the switch. For all switches, we use either silver or gold," he said.
Peterson expects switch prices to increase again in 2013. "Every year buyers and manufacturers want to drive down materials costs, so we're caught in the middle of rising labor costs and a market that wants a lower priced product. We're working to maintain market pricing and trying not to increase too much but we have to keep pace with the cost we're being burdened with."
The good news is that materials supplies are good overall, so switch manufacturers do not anticipate any tight supply or long leadtime scenarios in 2013 for pushbutton switches. NKK's leadtimes have remained stable from stock to six weeks for illuminated and non-illuminated switches, and C&K's deliveries range between eight to ten weeks.
TE Connectivity's leadtimes average between eight to twelve weeks, down from about eighteen weeks at the start of 2012. "It's a goal in 2013 to decrease these leadtimes even further," said Kautz.
For high runners, TE has invested in additional inventory to shorten leadtimes to four weeks plus shipment. Deliveries for some parts are less than four weeks.
Smaller, brighter and longer life
"We did not have to increase prices this year, and we don't see any factors that will drive up prices in 2013," said Marty Arch, national sales manager, NKK Switches.The biggest technology trends with pushbutton switches include miniaturization, illumination, and sealing for protection against harsh environments.
For example, there is increasing interest for NKK's programmable SmartSwitch, which allows customers to program the switch and reduce the number of switches required in a panel. The OLED SmartSwitch series features a SPST pushbutton with a built-in OLED display. The display life recently doubled to 30,000 hours with 40 percent pixels at 100 candelas per meters squared (100 cd/m²).
NKK also introduced several new illuminated pushbutton switches. The YB2 series of tamperproof, panel-seal pushbutton switches is IP65 rated. It offers a variety of options to tailor the switch for specific applications. The switches are available in both illuminated (bright or super bright LEDs) and non-illuminated models.
NKK's KP series of illuminated miniature pushbutton switches also provide a variety of options for front panels in instruments, control panels, and custom keyboards. The series is available with built-in RGB LED illumination and optional super bright red/green built-in LEDs that can be combined to produce amber.
Marty Arch, national sales manager, for NKK Switches, in Phoenix, Ariz., expects that the broadcast audio, medical, telecommunications, and transportation markets will be drivers for illuminated pushbuttons in 2013.
Value-added services also play a big role in switch offerings. OEMs are relying more on switch manufacturers to provide value-added services as a way for them to reduce labor costs and speed up assembly, according to Arch. Value-added services include custom legends and cable assemblies.
TE Connectivity introduced a pushbutton switch that uses a snap-action mechanism to achieve a higher life cycle and fast switching. The Blue series is available with contact ratings of 3 A, 125 VAC and 1.5 A, 250 VAC in vertical PCB mount and wire lug mount versions. Switches with gold plating offer 50,000 electrical life cycles. Silver plating models provide 25,000 electrical life cycles.
C&K Components also sees more requests for rugged and sealed pushbutton switches. The AP, NP, and HP series are the three newest industrial pushbuttons from C&K Components. These sealed switches are IP67 or IP68 rated with extremely high life operations. The AP Series is IP67 rated with a life cycle of 1,000,000 actuations; the NP Series is IP68 rated with a life cycle of 1,000,000 actuations; and the HP Series is IP68 rated with a life cycle of 10,000,000 actuations.