Cost Pattern: Raw Material Costs Account For More Than 50%

Oct 26, 2019

According to research by the Taiwan Industrial Technology Research Institute, raw materials account for 50% of the total production cost of Taiwan connector manufacturers. Some high-end raw materials still depend on imports, so fluctuations in raw material prices will have a greater impact on connector production costs. By analyzing the splitting of operating costs in Aerospace and Yonggui Electric's annual report, we found that the cost of raw materials for connectors is close to or exceeds 50% of its operating costs, followed by labor costs and manufacturing and processing costs. Leading enterprises benefit from scale effect and strong bargaining power of raw material costs, which is expected to improve production cost control.