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The History of the Molex Corporation

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Overview:

One of the largest suppliers of electronic interconnectors in the world, Molex Inc., provides electronic, electrical, and fiber-optic interconnection solutions. With a product catalog of over 100,000 products and facilities in 19 countries, Molex supplies interconnect products for nearly every industry and application including the computer, telecommunications, office equipment, military, industrial, entertainment and the automotive industries.

Company History:

Molex was formed in 1938 by the Fredrick Krehbiel as an offshoot of Krehbiel Engineering. Leading up to World War I, the U.S. purchased much of its supply of TNT from Germany and did not have the production facilities to support their future need domestically. The U.S. government approached Krehbeil to design a plant to generate toluol, a precursor for the production of TNT. Krehbiel designed the facility and the plant was built in Terre Haute, Indiana.

Observing the toloul plant in action, and noticing the piles of coal tar pitch that was created as a waste product, Krehbiel took note. Several years later, he noticed another waste product from an asbestos mine, fine strands of asbestos called asbestos tailings. Krehbiel combined the coal tar pitch with asbestos tailings and added limestone as a strengthening agent and created a new plastic material. Since the material was made from the waste products of other industries, it could be made very inexpensively. Krehbiel named the material molex, and in 1938, the Molex Products Company was born and the launched with their first product, flowerpots.

When World War II began, the war effort placed significant restrictions on the production of domestic products. Luckily, the molex material escaped notice while all other common materials used for molding products were forbidden for use in non-essential production. Molex approached the military to try to find some good applications for their material to support the war effort, but they found little interest. Molex itself had little idea of what the material could do, which made finding good potential markets difficult. As the company began looking for a market, the restriction on other plastics led Molex to position themselves as a viable replacement for known plastics such as Bakelite.

Molex found their new market in the toy industry, making toy pistols and submarines before expanding in to clock casings for Hanson Manufacturing and salt shakers for the Morton Salt Company. These products made Molex a success throughout the war years, giving them an opportunity to expand and take market share from competitors who had to shift their production to the war effort. Once the war ended, a slight change to the composition of molex, replacing the limestone dust with fiberglass, resulted in increased strength and flexibility. These improvements, as well as their cost, allowed them to compete very well with the other plastics coming back on the domestic market.

After World War II, Molex explored the electrical applications of their material and began to look at using their material in electrical appliances. Their first product in this market was a terminal block for a GE electric stove which proved to be very popular. Molex was quickly adopted in products throughout the appliance industry.

Building off that success, Molex continued to explore other applications and markets and in 1960 the y introduced their first electrical interconnect series. Molex found great success in this market and grew rapidly in the following years. The growth continued in to the 1970s as Molex started to expand overseas and rode the wave of the rapidly growing Japanese electronics industry. The Japanese market placed a large importance on local supply and forced Molex to open a manufacturing facility in Japan. By the end of the 1970's, overseas sales accounted for almost 10% of revenue for Molex.

Molex's experience in Japan taught them several important lessons as they continued to grow and expand overseas that they turned in to an effective expansion strategy. Molex continued to expand in to emerging electrical product markets, becoming a local supplier based near where the product manufacturing was centered. By the 1995's, Molex 's success in the computer, office equipment, and peripheral industries pushed their revenue past $1 billion.

1995 also was a landmark year for Molex as it was the first time they ever acquired a company, Mod-Tap W. Corp. Molex continued to shy away from growth through acquisition, even as the electrical interconnect market began to consolidate. Molex did make some strategic acquisitions that would expand particular product lines, such as the 1999 purchase of Cardell Corporation to expand Molex's automotive line of connectors.

Molex went through a significant downturn at the beginning of the new millennium as the computer industry slumped. Molex weathered the down turn and began to shift strategies towards a more aggressive growth strategy through acquisitions including the acquisition of Woodhead Industries in 1997 to expand in to the automation interconnect market. In 2007, Molex went through a global reorganization to streamline operations and optimize sales and support, setting them up for continued success.

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