24 Jan 2005
Diversification Delivers(HKTDC Electronic Components & Parts, Vol 01,2005)
Gauss Electronics Co Ltd
Innovation is the lifeblood of the electronics industry, and that maxim applies just as much to components suppliers as to manufacturers of consumer goods.
That, certainly, is the view of Gauss Electronics Co Ltd, which has more than 25 years experience in manufacturing mini transformers and trigger coils but has never been afraid to try something new.
"In the past, Gauss focused on making transformers and coils for use in camera flash products, which was a very stable field," explains spokeswoman Silon Tang.
"However, competition on costs became keener and keener with customers increasingly looking for cheap components, so we developed several new products."
Over the last decade, Gauss has successfully diversified into several new areas, including electronic ballasts and cold cathode fluorescent lamp (CCFL) inverters.
"We started to build CCFL inverters about two years ago because of demand from one of our longstanding customers whose factory is next to ours in Dongguan on the Chinese mainland," Tang explains.
"They build the CCFLs and refer customers to us and we build the inverters to match the length of the CCFLs, which can be between 200mm-2000mm."
The 28-year-old company now manufactures an extensive range of components, including power, high frequency, high voltage and audio transformers, coils and line filters.
Other lines of business include OEM products ranging from switching adaptors and power adaptors to battery testers - but not toroidal power transformers because different technology is required and the company does not see sufficient margin in the sector.
Its special expertise in coil winding, however, remains the core of Gauss's business - transformers and coils represent about 70% of production capacity - and Tang credits an ability to innovate in this area with maintaining the company's competitiveness.
"Some of our products are based on new techniques," she explains. "There are a lot of types of coils, and we make bobbin-less coils that require a special type of winding machine."
She says monthly production of these fine gauge wire coils is more than 200,000 units, all of which must be kept within a very narrow tolerance to meet customer specifications.
Another problem is that the unit cost has to be kept low because of tight budgets in industries such as the toys sector, which buys a lot of Gauss coils and transformers and demands low-cost components.
Coil winding equipment is expensive as the machines can cost more than US$12,000 and often run relatively slowly, handling only 2000 units per day.
However, Gauss has risen to this challenge with the creative thinking that has propelled it to the forefront of its market sector. "Our share of the market for bobbin-less coils is largely due to making our own winding machines," Tang reveals.
"Imagine how many modules are required and the investment involved if a customer requires 500,000 units?" Tang asks. "So we make our own machines, which cost around US$1,280, and have more than 50 winders in our production facility."
The company moved its production to Dongguan in 1988 and now operates two manufacturing facilities covering more than 35,000 square feet.
Gauss employs around 650 people and has a capacity of approximately three million coils and an equal number of transformers per month, most of which are ultimately shipped to the US. "A lot of our products are shipped to the mainland but the final product is often shipped to the US," Tang confides.
Gauss also has US customers that take direct shipments, as well as European customers who usually order small quantities. "Of course we also sell to Asian companies," she adds.
Gauss has always recognised that innovation and cost competitiveness must be supported by rigorous quality control and achieved ISO 9002 certification in 1999.
Good customer relations are also fundamental to Gauss, which works closely with its clients on component design and takes pride in meeting their individual needs.
"For new customers we usually request minimum orders of 500-1,000 units, but it depends on the value of the product," Tang notes. "For example, we have been dealing with Honeywell since 1997 and if it places an order with us for just one transformer, we'll accept it because you have to meet customers' requirements."
WRITTEN BY ROBERT PIERCE
Gauss Electronics Co Ltd