2005 - Molex

The Company believes that its success in achieving industry-leading revenue growth throughout its
history is the result of the following key strengths:
• Broad and deep technological knowledge of microelectronic devices and techniques, power
sources, coatings and materials.
• Strong intellectual property portfolio that underlies many key products.
• High product quality standards, backed with stringent systems designed to ensure consistent
performance, that meet or surpass customers’ expectations.
• Strong technical collaboration with customers.
• Extensive experience with the product development process.
• Broad geographical presence in developed and developing markets.
• Continuous effort to develop an efficient, low-cost manufacturing footprint.
• A broad range of products both for specific applications and for general consumption.
Competition
Molex intends to serve its customers and achieve its objectives by continuing to do the following:
• Concentrate on core markets. The Company focuses on markets where it has the expertise,
qualifications and leadership position to sustain a competitive advantage. Molex has been an
established supplier of interconnect solutions for more than 60 years. It is a principal supplier
of connector components to the telecommunications, computer, consumer, automotive and
industrial electronics markets.
• Grow through the development and release of new products. Molex invests strategically in the tools and
resources to develop and bring to market new products and to expand existing product lines.
New products are essential to enable customers to advance their solutions and their market
leadership positions. In fiscal 2005, the Company generated 30% of its revenue from new
products, which are defined as those products released in the last 36 months.
• Optimize manufacturing. The Company analyzes the design and manufacturing patterns of its
customers along with its own supply chain economics to help ensure that its manufacturing
operations are of sufficient scale and are located strategically to minimize production costs and
maximize customer service.
• Leverage financial strength. Molex uses its expected cash flow from operations to invest aggressively
in new product development, to align manufacturing capacity with customer requirements and
to pursue productivity improvements. The Company invested 14.3% of net revenue in capital
expenditures and research and development activities in fiscal 2005.
Molex competes with many companies in each of its product categories. These competitors include
Amphenol Corporation, Framatome Connectors International, Hirose Electronic Co., Ltd, Hon Hai
Precision Industry Co., Ltd., Japan Aviation Electronics Industry, Ltd., Japan Solderless Terminal Ltd. and
Tyco International Ltd. as well as a significant number of smaller competitors. The identity and significance
of competitors may change over time. Molex believes that the 10 largest connector suppliers (as measured by
revenue) represent approximately 51% of the worldwide market in terms of revenue. Many of these
companies offer products in some, but not all, of the markets and regions served by Molex.
The Company’s products compete to varying degrees on the basis of quality, price, availability,
performance and brand recognition. Molex also competes on the basis of customer service. Molex’s ability
to compete also depends on continually providing innovative new product solutions and worldwide support
for its customers.
Customers, Demand Creation and Sales Channels
Molex sells products directly to OEMs, contract manufacturers and distributors. The Company’s
customers include global companies such as Cisco, Dell, Ford, Hewlett Packard, IBM, Matsushita, Motorola,
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