TE Connectivity at Bernstein Conference: Strategic Growth in Focus

On Thursday, 29 May 2025, TE Connectivity (NYSE:TEL) presented a strategic overview at the Bernstein 41st Annual Strategic Decisions Conference 2025. CEO Terrence Curtin discussed the company’s robust growth strategies and market outlook, emphasizing strengths in connectivity solutions for transportation and industrial sectors, while also addressing challenges such as tariff impacts and competitive dynamics in China.

Key Takeaways

• TE Connectivity targets a 4-6% growth rate through the cycle, driven by demand in AI, EVs, and energy infrastructure.
• Operating margins are strong, with aspirations for 20% plus in both transportation and industrial segments.
• AI-related revenue is expected to exceed $700 million this year, with a forecast of reaching $1 billion next year.
• Capital expenditure is set to increase from $700 million to $900 million to support global capacity expansion.
• The company’s strategic presence in China includes 17,000 employees and nearly 20 factories.

Financial Results

• Operating margins are currently above 19%, with a goal of achieving over 20% in key segments.
• Free cash flow margins stand at approximately 18%, with a cash conversion target above 100% of net income.
• Organic growth is projected at around 8% year-on-year, with half being organic.

Operational Updates

• About 70% of manufacturing is conducted locally, reducing lead times to 8-12 weeks.
• The automotive business sees around 50% of its revenue from Asia, with content per vehicle increasing from $60 pre-COVID to the low $80s today.
• TE Connectivity has a significant presence in China, focusing on automotive, industrial robotics, and appliance manufacturing.

Future Outlook

• Growth is expected from the rise in EV adoption, autonomous vehicles, and data connectivity demands.
• The company plans to pursue bolt-on acquisitions, particularly in the industrial segment.
• Anticipates a 4,000,000 unit increase in EV adoption.

Q&A Highlights

• TE Connectivity does not face significant pressure from Chinese customers to switch to local competitors.
• The company is confident in its innovation pace and adaptability across industries.
• China exports 4,000,000 out of 24,000,000 units produced, targeting markets like Southeast Asia.

For a detailed understanding, please refer to the full transcript below.

Full transcript - Bernstein 41st Annual Strategic Decisions Conference 2025:

Stacy Rasgon, Analyst, Bernstein: Good morning, everyone. Thank you for coming. Thank you for getting up early. I’m Stacy Rasgon. I cover The US, semiconductor and semi cap space here at Bernstein, and it’s my honor to introduce our guest today, the chief executive officer of TE Connectivity, mister Terrence Curtin.

Before I start, I wanna mention if you have questions you’d like to ask or you’d like me to ask during the presentation, there should be a link to the pigeonhole form where you could submit those. I’ve got an iPad up here where they’ll come through. We’ll have time for a q and a at the end. So TE Connectivity, I don’t know if some of you may not be familiar with the the company. Hundreds of thousands of different products, a pervasive spot in nearly any any end market that you can imagine.

They contribute tech connection technology to a huge number of products and services that you probably interact with on your own basis every single day. They span across automotive and industrial and defense and consumer and networking and medical, hundreds of different manufacturing sites across the world, thousands of people and billions of dollars in sales spread across a global network. And Terrence is going to tell us all about it. So thank you so much for

Terrence Curtin, CEO, TE Connectivity: Stacy, and thank you everybody for learning a little bit more about TE Connectivity this morning.

Stacy Rasgon, Analyst, Bernstein: And maybe just to start there, maybe for some of the folks in the audience who might be less familiar with it, just give us a brief brief overview of it. You know? Like, what what do you do? What are your segments? What are your what what kind

Terrence Curtin, CEO, TE Connectivity: of products are you actually selling? So first off, being that I have Stacy here, I wanna build off of what Stacy studies every day, with the semiconductor space. So two key things when you think where you need, what we do, and connectivity. It’s where data’s going, and it’s also where you have power needs. And, certainly, when we talk about everything you do in semiconductor, that’s creating the brain around the data.

But guess what? It has to go through the whole architecture. It doesn’t stay in the semi, and that’s where where you need connectors. It’s where you need the sensing technologies that we have, and we’re a world leader in that. As well as where you need that electronics, you also need power coming in.

And, you know, these semiconductors don’t generate power by themselves. And we all know what’s happening to data. We all know what’s happening for the power needs that electronics drives. So when you think about the markets we’re in and to your question around segments, we basically organized into two segments. A a little bit over 50% is in transportation, and then the remainder is what’s in industrial.

And in industrial, it is broad. And then, you know, let me talk about industrial first. And when you think about industrial, you know, our largest business in our industrial business, and we have about $17,000,000,000 in revenue in total, is what we do in high speed, what does with the cloud providers. And we are benefiting from AI. You know, our revenue in AI last year was around 300,000,000.

It’ll be well over 700,000,000 this year. And this is where we do the connections that connect GPUs together. It is the connectivity when you think about that whole cloud network and artificial intelligence cluster. You need to have GPU to GPU connections, also things coming off the racks. They’re the types of things we do to really make sure that signal integrity and that data flow really gets to where the models need to go to.

Another big area that we have in our industrial segment is also energy connections. That’s another business where we’re benefiting from not only grid build out, grid hardening, but also what’s happened with renewables around the world. And that’s another area where the power element comes in. And then as Stacy said, we also have exposure to aerospace and defense, which is continually growing, you know, continually moving up to the right. And also industrial end markets, of broad industrial equipment where you need connections on the factory floor and factory warehouses, that’s one that’s been slow, and I’m sure you’ll ask me about that.

In our other segment in transportation, you know, our largest business is in automotive. And it’s not just what happens in power and the powertrain and electric vehicles. It’s also about data in the car. And when you think about autonomy in the car, the safety features in the car, all of that drives content increase for us, increases connectivity. And I know when I use the word automotive, one thing that I think is critical when you leave this room is our largest business in automotive is in Asia.

About 50% of our revenue in automotive is in Asia. And it’s very important that, you know, while we all know what’s going on in the West in automotive, just last quarter, we grew 16% in Asia because we’re with every OEM benefiting from EV adoption that is full steam ahead in Asia and also on software defined vehicles, certainly full steam ahead of what that comes out at, this just drives content and growth increase for us while we have a slow period here. And then we also do industrial trucks and things like that. But when you look at what we do, it really comes down to where data keeps going. AI only pushes it more out to the edge.

You need connectivity. You certainly need power connections, and that’s what we excel at, and then we’re a world leader in them.

Stacy Rasgon, Analyst, Bernstein: Do you guys have, like, a, like, a growth algorithm or something as you and we’ll we’ll we’ll put the near term aside

Terrence Curtin, CEO, TE Connectivity: for a moment. I will come back to it, but,

Stacy Rasgon, Analyst, Bernstein: like, maybe more fun for you. That’s the longer term. Like, how do we just think about the growth of this stuff, like, within automotive, within industrial content?

Terrence Curtin, CEO, TE Connectivity: Through cycle, we view we’re about a four to six grower through cycle now. Many of you are gonna say, what’s a cycle anymore? It is different by our markets, but we do sort of view when we look at you know, car production’s a sub GDP item. But when you look at it, we do sort of view four to six. In automotive where you ask specifically, we we grow about four to six above production.

Okay. So right now, production’s slightly negative. You know, we’re basically gonna grow at the low end of the four to six range right now this year, but we do think four And I think at the enterprise, while we have different cycles going on, we think four to six through cycle. And the big mega mega drivers are higher speeds everywhere.

Certainly what happens in automotive powertrains and energy infrastructure. Yeah. Got it.

Stacy Rasgon, Analyst, Bernstein: What’s your typical content like in a in a in a car, in an EV versus an ICE, China versus US?

Terrence Curtin, CEO, TE Connectivity: No. No. Well, it’s a great question. So right now, if you look pre COVID, we had we used to have about $60 of content per vehicle on average around the world. We’re up into the low eighties today, and that’s in a world where production’s down since pre COVID.

So it really shows the momentum that we’ve had around EV, especially in Asia because it’s it’s stalled in the West. We all know that. When you take a gas vehicle up to a hybrid, up to an e full EV, a gas vehicle is probably around $60 of content on average. Mhmm. Hybrid is one and a half times higher than that, so it’s in the low hundreds.

And a full electric is two times a gas vehicle because you have two powertrains. You have the traditional architecture. You would have a 12 or 48 volt, then you’re adding the electrical powertrain and totally different voltages where you have different needs. And now as we look forward, one of the things that really has helped buffer the content is what’s happening on software defined vehicles. The data connectivity in the car used to be around one meg.

That’s gonna be 10 meg, 25 meg, getting up to a hundred meg for all the over the top updates you need to do. So we’re also seeing a big content growth and data connectivity in the vehicle, which is a whole new architecture.

Stacy Rasgon, Analyst, Bernstein: Sounds like content’s growing more than four to six. Like, what?

Terrence Curtin, CEO, TE Connectivity: No. I mean no. Content is four to six above production because it’s also realized it’s about a $6,000,000,000 business.

Stacy Rasgon, Analyst, Bernstein: Okay.

Terrence Curtin, CEO, TE Connectivity: So it’s a big number.

Stacy Rasgon, Analyst, Bernstein: Got it. Okay. Got it. Who do you compete with in in particularly in automotive, maybe we’ll focus there for now.

Terrence Curtin, CEO, TE Connectivity: In automotive, when you look around the world, we typically will will compete against, regional players. Mhmm. People like Izaki will compete against companies like Aptiv, their connector division. And there’s also some other local regionals, but it is very different. You need to be very local, which I know may come back to some of your current questions, but it’s very important.

We have to design in what we do at the engineering centers of the world. Somebody have made a decision around a semiconductor element, a power supply element, then what they do is they work on the architecture, and that’s where we really excel. So the brain’s been picked with the semiconductor. The heart’s been picked with the power supply. How do they wanna bring that architecture to life from a connectivity perspective as well as how they wanna manufacture it.

And it’s a very important of our sticky business model. So when we design, we’re in Toyota City. Mhmm. We’re in Shanghai. We’re on the West Coast.

We’re in Detroit. And, certainly, we mirror their supply chain. So it’s a very local sticky business, and it’s it served us well in places like China, where, you know, our China business is almost three times the size in automotive of our US business. And we’re with every OEM in China.

Stacy Rasgon, Analyst, Bernstein: I mean, maybe that’s a good segue into what we’re seeing. So maybe to focus on the footprint for now, like so half of your auto business

Terrence Curtin, CEO, TE Connectivity: half half of it, you said

Stacy Rasgon, Analyst, Bernstein: in in in half of your footprint, your manufacturing footprint is in Asia and China as well?

Terrence Curtin, CEO, TE Connectivity: Or Yeah. Let me bring it back up to Total TE. So first off, when we think about, the tariff news, it’s important to understand, you know, while TE has about 17,000,000,000 in revenue

Stacy Rasgon, Analyst, Bernstein: Maybe we don’t have to worry about them anymore now. I I don’t know.

Terrence Curtin, CEO, TE Connectivity: Hey. I yeah. Play by play every minute. Give me a break. And keep track of that.

But when you look at it, for TE overall, 70% of what we do is outside The United States. So it’s important to realize when you think about the tariffs that have been put into place, what impacts, what relates to The United States. Globally, 70 plus percent of what we do is manufactured locally in region. So we’ve always been very focused on when we engineer things, how do we make sure we’re near the supply chains of our customers, not just engineering. So we are very local from a manufacturing perspective.

Stacy Rasgon, Analyst, Bernstein: How many manufacturing sites do you have, by the

Terrence Curtin, CEO, TE Connectivity: We have about a 20. Wow. Okay. And it’s about 40 in every region. And, you know, they are lined up for the industries we serve in region.

And so when you get into the tariffs, you really gotta look at what’s happened on our US element of business, which is about 4 plus billion dollars, which serves automotive, aerospace, medical. And in that, you know, there’s elements we do bring in more from Europe and other parts of

Stacy Rasgon, Analyst, Bernstein: the world.

Terrence Curtin, CEO, TE Connectivity: It’s not much we don’t bring much in from China. And they’re the things right now we’re working on. We’d said on our last earnings call, it’s about a hundred $30,000,000 a quarter of cost we had to do, to offset. About a third of that, we already were working mitigation strategies on sourcing because we have supply working with our customers. And the other two thirds, we would mitigate through pricing.

So, hey, tariffs every day, it seems to change a little bit. We don’t view it’s kind of a material impact to our earnings at all.

Stacy Rasgon, Analyst, Bernstein: Have you put any of those pricing activities into place yet? Or We have.

Terrence Curtin, CEO, TE Connectivity: So surcharges in areas, similar to what we did in 2017 where we had impact from this. Right. It’s a surcharge. Yeah. And, you know, whatever the dollar amount is, we basically pass along dollar for dollar.

So it has a little bit of margin dilution impact. But the key is working with our customers to say, how are they working their supply chain long term, and how do we help them to get to the right answer so they can be cost competitive?

Stacy Rasgon, Analyst, Bernstein: Got it. So those are sort of direct impacts. Doesn’t seem like it’s it’s that big. Any thoughts on indirect impacts? I mean, because I at least in semis, like, that’s kind of where the bulk of it is.

Like, there like, it’s there’s not a lot of direct. But, I mean, the indirect is, like, anywhere from zero to who knows. I’m I’m in the who knows camp, by the So I That

Terrence Curtin, CEO, TE Connectivity: makes two of us. I don’t I don’t think when you say, how does it impact somebody’s car purchasing decision and, you know, somebody’s capital budget, I’m not sure I’m the best person to do that. We’re running to what we see in front of us.

Stacy Rasgon, Analyst, Bernstein: Mhmm.

Terrence Curtin, CEO, TE Connectivity: The programs we need to win, where they’re taking their architectures, also where do we help them real time on the supply chain side to say, hey. There’s areas we can manufacture this different part in the world and help you get around it. Got it. Okay. What are you

Stacy Rasgon, Analyst, Bernstein: seeing just in general, like, in the near term environment right now? Be beyond just the the tariff noise.

Terrence Curtin, CEO, TE Connectivity: No. It’s it’s interesting right now. What we see and, certainly, I can only talk to what we said a month ago when we had earnings. Maybe you wanna remind people what you what what you did say. So what we did say in our last earnings was we continue to see, you know, stepping off last quarter, continued growth into this quarter.

We’re probably gonna grow about 8% year on year organically or total, with about half of that being organic. And, you know, what we were seeing is continued improvement in our order book. And I know the question you’ll probably ask is, hey. How much of that was pulling? I would tell you in what we do because where lead times are in our space, we didn’t have a material impact from pull ins.

Stacy Rasgon, Analyst, Bernstein: Where where are your lead times now?

Terrence Curtin, CEO, TE Connectivity: Our lead times typically run eight to twelve weeks. Okay. So they’re much less than something you would have in a semiconductor. And while while we talk to customers and some customers were thinking about it, with the uncertainty in the environment, we didn’t see people pulling triggers. But we continued to see across the in industrial complex a strengthening.

Mhmm. You know, AI, we talk of our AI guidance, and it wasn’t new program wins. It was really about ramping more, ramping faster, and we’re across a broad customer base. We aerospace and energy continued very strong trends we already had. Mhmm.

And the area where we actually saw an inflection of improvement, which has been an area that’s been weak for a long time, had been our industrials. So we’re the general industrial. Inventory was being worked out. A whole bunch of things were happening. Mhmm.

And we started to see orders inflect up. We did guide. We thought it’d stay flat, but we started to see orders pick up. And in the first, three, four weeks before we guided of our month after quarter end, we were seeing those same trends. And in auto, auto is Asia strong, Western world sideways, and sort of on a low base.

Yeah. And those trends, I don’t see them changing. It’s nice to see in Europe. You’re seeing more hybrids being pick picked up again. You’re seeing a little bit more bump there, but certainly a sideways environment in auto.

Stacy Rasgon, Analyst, Bernstein: Yeah. It does feel like, at least in in in semis, like, the industrial down cycle was eight quarters, 10 quarters. Right? Something like that. So, usually, the longer it is, hope hopefully, the bigger the upswing.

But You

Terrence Curtin, CEO, TE Connectivity: know, there should be an upswing. So we’ll

Stacy Rasgon, Analyst, Bernstein: we’ll I guess we’ll, I guess we’ll see. I was wondering if you you you talked about, like, growth like, long term growth targets, like, for the business overall. Can we can we talk a little bit, like, margin outlook and margin targets, like, in the different segments? And, like, what I I’m actually I I should know, but I gotta let you know where the margins are sitting these days, and and where are you versus, versus target? So, you know,

Terrence Curtin, CEO, TE Connectivity: our margins right now are a little bit from an operating margin perspective, is above 19%. Mhmm. When we looked at it, one of the things that was important is even in in a difficult auto production environment, you know, we’ve been running our automotive business at 20. And we always have said we had margin improvement opportunities in our industrial segment because that’s where we typically bring in m and a. We had some rooftop consolidations.

And one of the things that you you saw last quarter, if you watch us, is, you know, our industrial margins were up almost 200 basis points. Was that just on revenue scale? Or It’s revenue as well as the cost actions. So, really, when we look forward, we still have margin improvement opportunities in this environment. You know, we think both businesses should be running 20% plus.

And I think to your point around industrial, even auto, as volume comebacks with the whole level where we’re running the business to, you know, we’ll get nice fall through that that can go up from there. So 20% plus is where we think with what we do and what we should earn is where we should be at. And, you know, over the past couple of years, while there’s been different moving parts of cycles Mhmm. I think the team’s really done a nice job executing on the cost out actions Mhmm. As well as what we’ve been doing on delivering when the volume is there to really get good flow through on it.

Got it. Got it. Do you

Stacy Rasgon, Analyst, Bernstein: guys ever think about, like like, incremental gross mar it is something that semiconductor comes Incremental gross margins and Yes. Fall through as a percentage of revenue?

Terrence Curtin, CEO, TE Connectivity: It is different by segments. You know, our industrial segment will be higher because of the cost actions. You know, in our automotive business, it should be about 30 you know, sort of north of 25. And, you know, certainly, it depends on where the volume is. If volume comes cranking, we’re not as fixed cost as a semiconductor in their fabs.

You know, we’re more of a discrete manufacturer. Yeah.

Stacy Rasgon, Analyst, Bernstein: Got it. That that that makes, that that makes sense. You mentioned m and a. So there’s been a fair amount of m and a. There’s also been a fair amount of, I guess, divestitures.

And you used to have more than more than two segments. Right? We call I mean, we we used to sit up here

Terrence Curtin, CEO, TE Connectivity: and talk about that subsea business all the time.

Stacy Rasgon, Analyst, Bernstein: It’s it’s no longer there. But maybe you wanna talk a little bit about how how m and a has has actually sort of driven the strategy. And, you know, there’s been a quite a bit of transformation over the last

Terrence Curtin, CEO, TE Connectivity: No. It’s it’s been a lot. And I guess it also makes me realize how many years I’ve been doing this with you. They brought up subsea. Couple of things.

Subsea. Yeah. Yeah. Today versus ten years ago. 50% of the businesses we’re in today.

We weren’t in ten years ago. And there’s a whole bunch of other businesses that we divested that really weren’t gonna drive the value we think we can drive with our interconnect and sensors businesses. And, you know, I think we’ll always be an active portfolio manager, but the heavy lift around the outs is primarily behind us. It’s really about, you know, how do we improve the margin of this franchise and also the cash generation of this franchise that we can really play offense around this portfolio. And one of the things that was important as we went through the portfolio is, hey, cash conversion above a %.

You know, we doubled our free cash flow essentially over the past ten years while we did all this since improving the portfolio. And, you know, we view from a capital perspective, you know, we’re gonna have a balanced capital strategy. So on that free cash flow, we always target about a third out to a dividend. And then, you know, we would like to do bolt ons into what we do. Now most of those will go more in our industrial segment than our transportation segment.

It’s an area where there’s, you know, lower share, more fragmentation. And even this year, we’ve done two in the energy space where, you know, bulked up our presence and connectivity that we do in energy infrastructure and hardening of the the grid entirely in The United States. And, you know, that’s gonna double our position here in The United States where and take our energy business up to about a billion and a half total globally.

Stacy Rasgon, Analyst, Bernstein: What was what was the name of that one? Was a

Terrence Curtin, CEO, TE Connectivity: It was Richard as well as Harger with a smaller one we did. And think they’re the types of acquisitions you should expect out of us. And, you know, we do expect to get mid teen returns Mhmm. From a cash on cash return in year three, and both of those do that. So I think with the cash generation model, you’ll see us add on inorganically as well as the four to six we talk about organically.

Stacy Rasgon, Analyst, Bernstein: Are there other areas in industrial that you’re looking, like, to be

Terrence Curtin, CEO, TE Connectivity: focused on? Absolutely. You look across industrial, I think anywhere across the markets we play in, we look at. You know, in something like DDN, it might be more technology related. Places like energy, it’s you know, that’s a stickier, you know, very, fragmented business, be a little bit different.

And clearly, aerospace as well as the industrial market, all of them, we would look at how do we add to it.

Stacy Rasgon, Analyst, Bernstein: Got it. The the different pieces of industrial, like, how do they, like, at least, like, if you were to just, like, rank them by by size? Like, what’s what’s the biggest piece? Like, what’s growing fastest?

Terrence Curtin, CEO, TE Connectivity: Biggest is what we do in the industrial, segment, which is about $8,000,000,000. You know, the biggest Within industrial. Yeah. You have our DDM business, which does AI. That’s about $2,000,000,000.

Okay. Then you would come after that would be sort of general industrial. Then you would get into our energy business, and then sort of medical would be after that. Medical.

Stacy Rasgon, Analyst, Bernstein: Okay. Got it. You do sensors? Or

Terrence Curtin, CEO, TE Connectivity: We do do sensors. That’s on our transportation segment.

Stacy Rasgon, Analyst, Bernstein: Got it.

Terrence Curtin, CEO, TE Connectivity: Okay. Got it. Got it.

Stacy Rasgon, Analyst, Bernstein: Let’s talk about, about AI. So I I mean, you you gave some of the numbers in terms of the size.

Terrence Curtin, CEO, TE Connectivity: I was wondering when you were gonna get to We’ve

Stacy Rasgon, Analyst, Bernstein: Gotta get especially after last night, like, gotta get there. So you talked about some of the numbers, and it looks like, I mean, it’s growing hugely. Right? 700,000,000. Presumably, it’d be bigger

Terrence Curtin, CEO, TE Connectivity: bigger next year. Said it’s

Stacy Rasgon, Analyst, Bernstein: on a

Terrence Curtin, CEO, TE Connectivity: run rate to be a billion next year. Yeah. Yeah.

Stacy Rasgon, Analyst, Bernstein: So, I mean, just what exactly do you do there? You talked at the high level, but I mean, more specifically, what what are the kind you know, I I I I cover NVIDIA, everybody’s always know, this is a supply chain that everybody’s just, like, laser focused on it. And, like, anybody that’s in the supply chain, any little single data point just gets pulled out, blown up. And so, like, maybe you can give us a little bit of color about specifically what you what you guys are doing in this space.

Terrence Curtin, CEO, TE Connectivity: Well, let’s explain how we touch the customers because when you think about what we do, you know, it’s not just what the GPU and TPU players do. It’s also what the whole ecosystem does. And, you know, not only do we cover the chip makers, we’re also covering the DSP providers on the side from a the signal chain perspective and then also the ODMs and the CMs. So when you think about how do you cover this space, while there’s certainly companies that get a lot of noise in the middle, you gotta cover everybody so you’re covering that architecture and how it evolves. What we do there is things that we’ve done traditionally.

It could be interconnects on the face faceplate. It could be interconnects on the board. When you get to AI, the element that has supersized the growth for the connector industry is also the direct connections that you have that go GPU to GPU. These are, connector cartridges that can be, you know, five feet tall that are doing direct connection GPU to GPU, where in the past, you would go through a board. And the board would come out, and then you’d have a connectorization on it.

And there are things those architectures are driven by the hyperscalers. Mhmm. Architectures are different. Certainly, some of the hyperscalers do their own GPUs, TPUs. And from that standpoint, we engage with all of them.

So our breadth is across the whole ecosystem, and that’s the thing that’s nice about what we’re driving. And like you said, we are in that supply chain. It’s because what we do in the high speed Mhmm. How does it jump from one twelve to two twenty four, how they’re figuring out getting to four forty eight. We’re part of that discussion on the architecture side Mhmm.

Dealing with their system architects.

Stacy Rasgon, Analyst, Bernstein: Got it. Do you do anything on the power side there as well?

Terrence Curtin, CEO, TE Connectivity: Or We also do power side. So, certainly, the bigger opportunity for us is on the data interconnects or the signal interconnects, but also the power interconnects are important. And then certainly how you make that more efficient, where does cooling come in, things we do with liquid cool bus bars from a connection perspective we do. So we’re also part of the power interconnects. We’re not into the complete cooling side, though.

That that’s not

Stacy Rasgon, Analyst, Bernstein: where we go. Got it. Got it. You know, everybody in semis has always been worried about CapEx peaks and everything. Doesn’t sound like you guys are terribly worried about, AI CapEx peaking anytime soon given the growth targets at the end.

Terrence Curtin, CEO, TE Connectivity: No. We’re not. And, actually, our customers are telling us to ramp faster. So I know there’s always news out there that somebody might have paused. I would tell you with the wins we have, it’s how do you put in more capacity, how do you ramp faster, working on the next gen, which is always a very important thing.

So we are not worried about it. You know, we’re investing along with them. Mhmm. You know, our CapEx this year, we’re going up from 700,000,000 to 900,000,000 within our cash generation model, and a lot of that growth is doing to make sure for the ramps and the capacity for AI as we build it around the world to support their supply chain. Got it.

You play in traditional data center as well? Absolutely. Absolutely. So I haven’t even gotten a traditional data center question in a while. But, certainly, what is what we call non cloud Uh-huh.

And the data center side. And while early in the AI run, that was sort of slow. We’ve seen that pick up nicely. We have seen that pick up. Mhmm.

We’ve seen the enterprise also pick up.

Stacy Rasgon, Analyst, Bernstein: Mhmm.

Terrence Curtin, CEO, TE Connectivity: So there are areas you know, we always view AI is gonna drive a lot of bump effects all the way out to the edge, which we’ll benefit from. But from that standpoint, we have seen data center pick up.

Stacy Rasgon, Analyst, Bernstein: Okay. Interesting. Any any trends there by geography? Like, everybody wonders about again, we’ll we’ll talk more about China, but China versus rest of the world is a Well, we do enterprise.

Terrence Curtin, CEO, TE Connectivity: Similar to most, we cannot serve the China piece because it not only comes where you have I where you manufacture, it’s also where the IP is from. So we Even in

Stacy Rasgon, Analyst, Bernstein: traditional data center, you can’t serve China? Depends who the customer is. Okay.

Terrence Curtin, CEO, TE Connectivity: So I would I would tell you it is, on the high speed interconnects. We were, during the first administration, blocked from selling. Okay. So on so from that viewpoint, you know, when we look at it, it’s very much driven by the western trends for our business, anything we’re seeing.

Stacy Rasgon, Analyst, Bernstein: Got it. Do you have a point of view just long term on whether or traditional data center is is impaired by the growth? And by the I’m asking for selfish reasons because, like, I I cover some of the stocks that that that sell into those markets as well.

Terrence Curtin, CEO, TE Connectivity: Because we always play as the speed to move up, you know, we don’t think it’s impaired in how you have bump downs now. Do you have cannibalization? Yeah. So imperative, I think, is the strong word. There’s definitely cannibalization.

But then also has the AI infrastructures evolve Mhmm. Is gonna be a key question.

Stacy Rasgon, Analyst, Bernstein: Got it. Okay. Let’s use it as a segue in into China. And so maybe if you could just start just give us an overview. You we’ve had we’ve had sort of rolling waves of export controls and things over the last several of those, not not just from Trump one point o, but also from Biden and everything.

How is just the general your ability to do business in China, how has that evolved over the last several years in the wake of all of the the regulatory headwinds and and geo geopolitics? Yeah. You got time?

Terrence Curtin, CEO, TE Connectivity: So first off, seriously, TE’s been in China for three decades. We have 17,000 employees. We design locally China. In China. We have close to 20 factories.

And, you know, when you sit there, we’ve always been an element of we design locally. We’re gonna manufacture locally. And while what started as supporting western companies, we, a long time ago, said we have to win with the locals. And winning with the locals is not designing elsewhere in the world and saying, here’s a product. So when you look at we’ve always had Chinese competition.

Mhmm. I I wanna stress that. And so that’s always been true. When we look at it, we’ve gotten more focused on what are the applications we play in. So to your question around data center and high speed and cloud and AI, that’s not an area we play in.

Mhmm. That’s an area that we don’t think the risk profile is right on, and certainly, there were also limitations. When you look at where we do play and you think about TE in China, number one is in automotive. And, you know, that is really making sure we capitalize on what is the biggest car producing country in the world. You know, they are exporting 4,000,000 units out of their 24,000,000 units that they produce, and that’s gonna go to places like Southeast Asia.

It’s gonna go to other parts of the world even if it is not here. And, you know, how do we support them as they do that? No different than we support our western companies. So that’s a very important part, and that’s probably over 50% of what we do in China is into the automotive industry. Also, the heavy truck side is similar.

So what we do in the heavy truck side Mhmm. Whether that’s on road truck, ag, and so forth, we do that as well. We’re very strong there, very local. And then it you really get into the industrial space where we’re serving local robotic manufacturers from a connectivity perspective, designing with them on the factory automation side. And then we also support the appliance makers that are there.

Oh, okay. Yeah. Since that is the largest appliance there, you know, not not a high-tech business, but a real sticky business, which we’ve always had Chinese competition, and we have 40 to 50% share. So there are areas that we’re very targeted in that we’ve always been. And, you know, if we went back pre all of this, we would’ve been broader.

Mhmm. But as we think through risk profile as well as where do we wanna make place our bets, that’s where we play there. And, you know, it’s been growing nicely for us, across all four.

Stacy Rasgon, Analyst, Bernstein: How much business do you think you’ve if you’ve I don’t if you quantified it up, but how much business do you think you might have lost given all of the the the regulatory headwinds that we’ve

Terrence Curtin, CEO, TE Connectivity: In the in the and specifically the data center side, we’ve actually told us it was you know, back in seventeen, eighteen, nineteen, it was $3,400,000,000 we walked away from, not only regulation, but also proactive things to really make sure, hey, where we were gonna place our bets going forward. Because it would that’d be a lot

Stacy Rasgon, Analyst, Bernstein: bigger now too, probably.

Terrence Curtin, CEO, TE Connectivity: That would be a lot bigger now. Yeah.

Stacy Rasgon, Analyst, Bernstein: I mean, so you talked about Chinese competition, and and I hear you you you compete very well. Do you think the Chinese competition has gotten more robust in the wake of all of these? Like, I I I worry, again, for my space, you know, and and Jensen last night on on the NVIDIA call, I kinda talked about this. Like, you might be we’re sort of forcing the Chinese to be creative, you know, and engineers tend to do their best work when they’re under constraints. And, you know, we’re developing local ecosystems that they probably would not have developed like otherwise.

Like, what does the Chinese competition look like, you know, in five years or in ten years, when they’re after being forced to, like, exist and and live and and try to thrive under these kinds of new rules?

Terrence Curtin, CEO, TE Connectivity: Well, first off, I would say, I’m not a semiconductor guy, so I’m not I can’t talk to their I’m just using Chinese competition as a pattern. Chinese competition has been good for a long time. Mhmm. You know, we’ve had that. We’ve had to compete against them.

They make good quality. Cost point’s important. Speed is important. So when you sit there, if you’re gonna win in China, you need to hit all of those elements. And it isn’t just speed and low cost.

It is very good quality. And from that viewpoint, I think that only continues to accelerate. They do have very good scale. We take advantage of that scale as well from a when we use certain Chinese suppliers or sub suppliers to serve our Chinese customers. And, you know, honestly, we gotta provide value to our customers.

We typically go out multigenerational road maps to make sure we’re staying ahead from an innovation. But when you look there, you shouldn’t have an attitude about China that is, oh, they’re decades behind, at least in what we do. Now they are good, and, honestly, our our team’s very good. We have over 2,000 engineers in China Oh. That are designing locally.

So it is scale. This isn’t five design engineers. This is real scale. It’s an investment we’ve continued to make in those markets we wanna be deep and wanna be local in. Mhmm.

And, you know, from that economy standpoint, it it’s been good for us and and important to our strategy.

Stacy Rasgon, Analyst, Bernstein: Got it. Got it. I guess, could you talk a little bit about what you do in health care? This is do I have this wrong? I seem to remember you used to talk about this you used to talk about a broader, like, push toward harsh environments.

Was was that a while?

Terrence Curtin, CEO, TE Connectivity: You you are. You are. We have been doing this a long time. So yeah.

Stacy Rasgon, Analyst, Bernstein: So health care is part of that, think, is One

Terrence Curtin, CEO, TE Connectivity: of the things, to your point on harsh environments, was as we were going through the portfolio, you know, harsh environments was where are you dealing with connections that are really dealing with the harshest environments possible? It may be, you know, in in an AI application, you’re getting things up to a signal rate, a temperature rate that these things, you know, are dealing in a harsh environment. It could be a space application. It could be something going into a body. So, you know, we do have a medical business.

Part of our industrial is right. $800,000,000. It’s where we do things that are really around things that go into the body. Mhmm. It serves the major device manufacturers.

We only do things with from a device side. We also like things that also have you know, you’re taking pictures inside the body. You’re also doing EP type procedures from an interventional perspective. And there are things that we bring our know how around fine wire, termination, sensing together. And it’s it’s a business that, you know, we would have thought never cycled.

During COVID, it did. We think that’ll be a high digital high single digit growth rate long term, but we had sort of a weird cycle during COVID that we would have never thought we’d have. Yeah. But everybody’s had those.

Stacy Rasgon, Analyst, Bernstein: Yeah. Have we by the way, have we kind of worked through all of the the COVID boom bust? It feels like we have. I’ve I’ve never quite seen a cycle like that before. So

Terrence Curtin, CEO, TE Connectivity: You’re right. I agree with you. We haven’t seen a cycle like this. Medical was the last one I would tell you we we’ve worked through, and and we just got through. But, otherwise, it does feel inventory levels feel good around the world for us.

Distributors got them down. Our customers got them down. Industrial is one of those areas things were laying lingering. But net net, it feels like all those excesses in the interconnect world have been through. And it’s where places like industrial have been weak for a couple years.

You sort of sit there and go, it feels like it can only go up.

Stacy Rasgon, Analyst, Bernstein: Yeah. Yeah. That’s it’s you know, again, I I don’t wanna talk about pull forward or anything anymore. But it does feel like I again, absent anything else, I could certainly start to believe that we’re at that point after 10 quarters. I mean, I hope so.

You mentioned the sensors in your automotive or your transportation. Can you talk a little bit more about that business?

Terrence Curtin, CEO, TE Connectivity: No. It’s a it’s a business that honestly you know, we did m and a probably a decade ago, and it’s one where, strategically, we got it a little wrong. You know, we were trying to take it more into transportation. It was a business we bought that wasn’t, and we’ve been into an area of doing some pruning work on the portfolio, improving the profitability. The profitability has been improving, but we’re in the last stages of our pruning that will run-in through the end of this year.

And that’s one of the reasons it hasn’t been growing, but it’s an area that the stickiness of it and what we do there and where we focus on and, excuse me, industrial application, medical applications Mhmm. Selective automotive applications. They’re the areas where we’re focused on in that. And I think in 2026, you’ll see that return to growth.

Stacy Rasgon, Analyst, Bernstein: But you have the whole segment. It’s it is still embedded within the

Terrence Curtin, CEO, TE Connectivity: Embedded within transportation because some of the the processes and plan turn in point.

Stacy Rasgon, Analyst, Bernstein: What’s the typical, like, sensor content that you have in the car? I mean, are

Terrence Curtin, CEO, TE Connectivity: you talking, like, $80.80 bucks, like, over the content in the car is more like 4 to $5, and that’s not included in and that is not included in the 80.

Stacy Rasgon, Analyst, Bernstein: Got it. I I feel like you had targets, like, once one ended, that was higher than that. That number seems low

Terrence Curtin, CEO, TE Connectivity: to me. Just trying to get up to $10. 10 dollars. Okay. It it is not 80, though.

Okay. We will not be abroad to that scale like we are in the, connector side. I mean Okay. The connector side, I can honestly tell you, except where we’re a lot not allowed to sell to, we’re on every car in the planet, whether it be a traditional interconnect and a low voltage environment, high voltage environment, or in a data environment. Yeah.

It’s a pretty unique position.

Stacy Rasgon, Analyst, Bernstein: I guess to build on that even, like like, in in an EV where, like, a lot of the content, exactly what is it that’s driving the content? Is is it is it is it it’s it sounds like it was data. Is it power?

Terrence Curtin, CEO, TE Connectivity: I mean So in an EV specifically, you know, we we all know the cars we had when we grew up. Crank a window, very, mechanical. What you have is a normal car just has a 12 volt or 48 volt overlay from an architecture. Whether it’s an ICE engine or an electric vehicle, that carries over. When you put in an electric vehicle powertrain, you’re going up to 400, eight hundred volts starting at a charging inlet.

It then goes down to a motor. There’s connections all along there. Also, electronics around the charging inlet the charging inlet’s a connector. Then you go through and you do switching, how power switch it back from the battery. There’s connections there as well as there’s contactors that we do.

Uh-huh. And so you really have when you take the engine out, you’re putting in a completely electrical flow of power, very high voltage, completely different technology Mhmm. Because what you’re dealing with, safety features on top of it because if somebody works on it, you know, it could hurt them. So there’s material science, there’s connection, and then there’s also the element of how you get to fast charging, and that creates more challenges from an engineering perspective. So that whole electrical overlay for the EV or if you have a hybrid creates a whole new, electrical overlay that benefits us from a connectivity perspective.

Stacy Rasgon, Analyst, Bernstein: How many, like, physical parts do you have in an EV? A lot. It’s like hundreds? Is that

Terrence Curtin, CEO, TE Connectivity: what we’re talking In some cases, it could be

Stacy Rasgon, Analyst, Bernstein: up to a thousand. Wow. Yeah. Got it. I wanna come back to the pricing that you talked about.

So I I I get that is the the surcharge. What are your typical pricing trends on this stuff? Does pricing go up for you? Is there cost downs, like,

Terrence Curtin, CEO, TE Connectivity: built into this? So in at the TE level, price x let’s take tariffs out because that’ll be a surcharge. Pricing’s been pretty flat. You know, in our industrial businesses, you typically have, you know, areas because of fragmentation that’s slightly up, you know, maybe plus one, plus two. And in automotive, depending upon where material costs are, you know, you can get productivity maybe a point give back on that side.

Mhmm. So net net at the total level, it’s pretty neutral. Little bit get back on on the more concentrated businesses, but in the fragmented, it’s typically slightly priced up to be zero at the company level.

Stacy Rasgon, Analyst, Bernstein: Got it. And now you talked a little bit about, cash return targets and capital allocation. Do you have, like, a model for cash generation, like, targets? What what is that?

Terrence Curtin, CEO, TE Connectivity: Totally. So one of the things, you know, we’ve worked hard on is to get the cash conversion of a % for TE. Okay.

Stacy Rasgon, Analyst, Bernstein: Net income to free cash flow, you mean?

Terrence Curtin, CEO, TE Connectivity: It’s net income. It’s just a very simple net income, free cash flow ratio. And, you know, this year, we’ll be above that. Okay. And even that’s with the investment I talked about with AI.

Stacy Rasgon, Analyst, Bernstein: Why is why is that? You have inventory flushing out? Or, like

Terrence Curtin, CEO, TE Connectivity: No. Inventory has come down, but it it’s just how we run the business is much more efficient than we did. It also is the portfolio that we have, and we continue to believe that that % free cash flow conversion is the right element to it. And it’s improvements we’ve made across all working capital elements, capital deployment elements, and having a cash generation model like that just gives a lot of choices. Mhmm.

I mean, our balance sheet’s about even with the deal we did with Richards where we took our leverage up, we’re still only about 1.5 times levered.

Stacy Rasgon, Analyst, Bernstein: Oh, okay.

Terrence Curtin, CEO, TE Connectivity: So very comfortable from a leverage perspective.

Stacy Rasgon, Analyst, Bernstein: Any thoughts about it taking that higher? Or is that

Terrence Curtin, CEO, TE Connectivity: We we would if, you know, like, from an m and a perspective. So when we did our Richards deal that we just announced, that was about $2,000,000,000. Mhmm. About 1,400,000,000.0 in that, we put on permanent leverage. So we took it up to $1.05.

We will take it up if we see strategic opportunities to do that. Let’s face it. We generate a lot of cash Yeah. To begin with. So that’s a good problem to have.

So so your free

Stacy Rasgon, Analyst, Bernstein: cash free cash flow margins must be, what, high teens?

Terrence Curtin, CEO, TE Connectivity: Or It’s high teens. Yeah. It’s about 18%.

Stacy Rasgon, Analyst, Bernstein: How big was Richard’s, by the way? Just revenue revenue.

Terrence Curtin, CEO, TE Connectivity: Revenue is about 400,000,000. It’s about a 35% EBITDA business growing, you know, low double digits. Okay. Cool. And we got about

Stacy Rasgon, Analyst, Bernstein: 10 left. Do you wanna move to the lightning round? Sure. And and, again, if anybody else has questions, you can feel free to submit them, and we’ll we’ll get them up here. So if EV releases shift toward cheaper price points for mass market, how does that change your content increase math?

Originally, two x that of a gas vehicles.

Terrence Curtin, CEO, TE Connectivity: Actually, it stays the same. You know, it may come down a little bit, but even with what we see with what we do in China, which, let’s face it, the cost point there

Stacy Rasgon, Analyst, Bernstein: Would would that be comparing, like, sort of, like, I guess, tier to tier? Like, same

Terrence Curtin, CEO, TE Connectivity: It is tier to tier. Sorry. No. Great thing. Tier to tier.

But when you look there, that still comes into you. You have that separate powertrain. Mhmm. And even though there’s been we have to realize of the world’s 85,000,000 cars, about 25,000,000 of those are electrified, whether it’s EV or hybrid. You know, we see another 4,000,000 units this year.

So you’re gonna continue to have that go up there. And like we’ve always said, an element to have EV adoption is that cars need to be affordable to the average person. It can’t be a hundred thousand dollar EVs that will make it a very niche product. And that’s what we like coming out and certain OEMs have. You know, they have a and b class cars that are coming out that are electrified.

Content does go up on those because you have this extra powertrain.

Stacy Rasgon, Analyst, Bernstein: Got it. Have you guys ever given a target for, like, what what you think EV penetration is in five years or in ten years? Or

Terrence Curtin, CEO, TE Connectivity: Well, we’ve said this year, we think it’s gonna be another 4,000,000 units. We sort of think you’re gonna continue to have a 4,000,000 unit step up, certainly driven by Asia. And when we say that, it’s not just EV. We include hybrids in it because we we benefit from both. It’s not

Stacy Rasgon, Analyst, Bernstein: a question here, but, like, it it strikes something else with you. Do you guys benefit from, like, autonomous vehicles?

Terrence Curtin, CEO, TE Connectivity: Autonomous vehicle is when I talk about data in the car Uh-huh. You’re basically putting a whole data network, Ethernet net network in the car so that anything can hang on it, software updates. So when you look at it, you know, historically, we might have had $5 due to data connectivity in the car. As we look going forward, we’re seeing much more penetration options as that’s coming in. You also have cars going from ECU to its own architecture.

That drives content up because that drives because that drives more complex interconnects while it simplifies the harness. Mhmm. All of that benefits us, and that’s what we we call it data. Mhmm. But it’s autonomy, and any software defined vehicle Got it.

Gets tied into that bucket. Got it. So thanks for that. Got it.

Stacy Rasgon, Analyst, Bernstein: What part of your business competes with Amphenol? Is your profitability similar where you overlap?

Terrence Curtin, CEO, TE Connectivity: So twofold. We compete with them on the AI side and primarily in the a d and m side. They are our bigger areas where we compete, and I would say our profitability is similar in those markets to them.

Stacy Rasgon, Analyst, Bernstein: Got it. And so there’s a question on value valuation due to the companies remains very wide, perhaps given your exposure to industrial. Don’t if you have a point of view on that or not. It says the valuation between the two companies remains very wide, perhaps given your exposure to industrials.

Terrence Curtin, CEO, TE Connectivity: I think it’s more due to exposure to automotive, personally. Mhmm. But, certainly, that’s for you all to decide.

Stacy Rasgon, Analyst, Bernstein: Got it. What’s the competitive advantage you have required to win in to win in your part in what is the competitive advantage required to win in your part of the AI supply chain? Why is that not replicable by competitors?

Terrence Curtin, CEO, TE Connectivity: First off being, it starts with the technology of what you can do on high speed connectivity. And, you know, certainly, one competitor we talked about and another US competitor, there’s three of us that excel in how do you move up to the speeds we’re at. And, you know, going from a 12 meg to 224, trying to figure out four forty eight, That innovation path to make sure what we do doesn’t slow down the semiconductor, that’s very hard innovation work. On top of it, you need to be embedded in the ecosystem that we talked about earlier. You have to touch all the parts in that ecosystem to really make sure it happens.

We we do that. And then the third element that is imperative, it’s not just about innovation. The hyperscalers want you to ramp at a pace that is like no other, and you have to come and deliver all three. So if you have innovation and you don’t have ramp speed, you’re not gonna win a program. If you’re not covering the ecosystem and those players as that architecture, you have a gap.

So there’s really three core elements. When you deal with that space, that is critical. Mhmm. And, you know, the hyperscalers are very clear on those three. And if you can’t meet all those three, they don’t have time to work

Stacy Rasgon, Analyst, Bernstein: with you. Got it. And then, you know, I’ll add a question to on on top of that. So, you know, NVIDIA has this sort of, like, annual cadence, which is quite a bit faster than they used to go. Like, how challenging is that for you to keep up with?

Terrence Curtin, CEO, TE Connectivity: It is. I mean, it it is it is the fastest pace, But let’s face it, when you’re working on something that’s hard and innovation and also helps drive the growth Mhmm. The teams work on it. And, you know, it is a pace that, you know, has not been seen in the data data side seriously. Our teams did a great job during cloud when the whole cloud with the hyperscalers started.

Now you’re into the AI. And, you know, we’ve been able to build muscle now over the past eight years to really say, how do we make sure we’re ramping in the pace they need because everything just shifts left. I mean

Stacy Rasgon, Analyst, Bernstein: How many engineers do you have working on in the AI space?

Terrence Curtin, CEO, TE Connectivity: In in that unit, we have about 500 engineers alone working on high speed, not just AI. Got it.

Stacy Rasgon, Analyst, Bernstein: Got it. Within AI data center, TA does not seem t does not seem to play in the optical layer. Why?

Terrence Curtin, CEO, TE Connectivity: We do pay in the passive optical layer. I mean, certain elements of the optical, we do play in. It’s you know, are we a full optical company? No. What’s nice is, speeds transition.

You’re gonna see a combination because there’s a lot of other constraints that we have to work through. Power constraints, cost constraints, ramping constraints. So you’re gonna have a lot of things, and it’s an area we’ll continue to look at, but it has to be we bring something to it.

Stacy Rasgon, Analyst, Bernstein: Got it. And the the other part of this was it says, has that ever gotten the way of winning orders? Do customers prefer one stop solutions? No. K.

Full stop. No. Okay. Do you see pressure on your domestic Chinese customers to buy less from you and more from local competitors given rising tensions?

Terrence Curtin, CEO, TE Connectivity: We have not. You know? So where we pick to play and certainly, we have to compete every day like we talked about in the earlier China discussion. And, you know, we have our resources that are local. So I I do think we show up as a local player, and I think it’s also proven in the success that we’ve had.

Stacy Rasgon, Analyst, Bernstein: Got it. How easy is this to swap out parts between competitors anyways, especially in automotive? Can’t be that easy.

Terrence Curtin, CEO, TE Connectivity: You you typically have platform changes unless there’s a quality issue. I mean, so it it’s when and similar to the automotive industry in China is a fast moving paced industry. It’s much faster than we have elsewhere in the world. So why would they change you out if you’re doing what you’re supposed to do? You’d have to get to a platform change.

Stacy Rasgon, Analyst, Bernstein: Got it. Got it. Is innovation getting harder, particularly in AI? What do you need to do to stay ahead?

Terrence Curtin, CEO, TE Connectivity: I think I think the one thing around innovation everywhere, it’s just pace has accelerated everywhere. And, you know, I don’t I don’t think it’s harder. I think it’s the pace is just accepting what the pace is at, and that’s in every industry. Mhmm. It’s not just AI.

Certainly, what the hyperscalers and the AI players do are the fastest. Mhmm. But you see car cycles changing. You see industrial cycles changing. And that’s just reality that we help our engineers work through.

And, you know, it also is why do you have to be focused? You know, it’s why you’ll see us prune stuff, exit things. Because if it’s a distraction, we shouldn’t be doing it. Got it.

Stacy Rasgon, Analyst, Bernstein: How long is the typical life cycle of your your parts? I know it’s gonna vary by end market probably, but, like, do you still sell stuff today you were selling, you know, twenty five years ago? How old are you? Too old.

Terrence Curtin, CEO, TE Connectivity: So, you know, they they they’ll be defense products that are older than us. Yeah. So, you know, one of the things, if it if it meets the need, if it meets the quality and, you know, it’s at a cost point, an engineer is not gonna change something. Mhmm. And even when we have a new car platform, and I I I’ll joke, it might be the interconnects that are on the mirrors.

If the technology doesn’t change, they only need to change it. They’re not gonna change it just for changing it. Mhmm. So you get a stickiness in it. So it’s a it’s a real blend where there’s things that change constantly.

You talked about how many SKUs we sell. We scale hundreds of thousands of SKUs because there’s an element of standardization, but there’s also an element of customization that creates a real stickiness that we have that I think is unique. While semiconductor is a higher tech Uh-huh. Skew is much more narrow. Ours is there because it’s the customization we do over the semi.

Mhmm. And you get into some things change and some things never change, and it’s it’s sticky.

Stacy Rasgon, Analyst, Bernstein: Got it. Love it. Love sticky. That makes tools. Yeah.

Well, we got a couple of minutes left. As always, I will give you your soapbox. Got a whole room full of investors here. Why should they buy your stock?

Terrence Curtin, CEO, TE Connectivity: Well, first off, I do wanna thank you all again for for listening today. Number one is I hope what came through is the growth levers we have. And the growth levers we have today are very different than the growth levers we had five years ago. How we positioned around the benefit we’re getting from AI, certainly, next gen automotive, as well as what happens in energy. All of those are things that are creating new growth vectors as some things have slowed.

The other thing is, you know, for those of you who’ve been around us, I know you know we’ve had a margin journey, and you may say, well, Terrence, you’re close to finishing it. I don’t think it’s done. You know, we’ve always said we can be 20% plus. We’re close to that 20. I do think with what we’ve done and we’ve proven it over the past couple of years of how the business is operating, this is a much more resilient business than the one if you looked at us five years ago.

And the last thing is the cash returns and the cash generation power of this business, you know, is very different. You know, a % cash conversion, what we would return to you all if we don’t see strategic options from an m and a perspective is always something you’ll you’ll get from us. And, you know, I do think the stickiness about our business model is unique. So I know you’re semiconductor. We sort of have industrial elements with technology elements, and I really think we have an element of the best of both.

So I appreciate your time this morning, and hopefully, I get caught up with y’all and some of the one on ones I have today. So thank you, everybody, and

Stacy Rasgon, Analyst, Bernstein: thank you so much.

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