TE Connectivity November 2025 Investor Day

Key quotes from the Investor Day

(note: bold and highlights are my own)

“This is a very technical business. We pick very hard problems that we’re only going to work on. And I want you to remember that because I’m going to spend time on building why we believe this business is very sticky…”

“But when you see the value we have to create and what gets relied on [through] our products, this is a super sticky business that is engineering-intense and is absolutely critical to our customers to bring their innovations to life.”

“Two things that will not change, and our Board is here, so you can ask some questions as well. First off being our absolute commitment to increase the dividend as we grow free cash flow. We’ve always done that. We’re going to continue to do that, and that will be approximately 1/3 and absolutely committed to remain focused on ROIC. We do have an ROIC mindset in TE when we think about deployment of capital, whether it’s organic, inorganic, [or what] we’ll return to you. And that’s going to continue.”

“The source of our growth and our momentum is really rooted in our customer relationships and our broad product portfolio with durable content drivers, where TE is uniquely positioned in markets with secular growth trends.”

“Our diverse portfolio of businesses has durable competitive advantage. Terrence touched on those, but I want to go a little bit deeper. It really does start with customer intimacy. We create customer intimacy through engineer-to-engineer relationships at the architecture level with our customers. That allows us to leverage our deep technical expertise to co-create with our customers. Because we manufacture most everything that we build, as Terrence was talking about, that gives us the ability to simultaneously innovate our manufacturing processes while we’re engineering the new designs with our customers. That gives us the capacity to build quality into our manufacturing process and our product, which is critical for our customers. If you think about that value proposition, that’s been our value proposition for years with our customers.”

“Next, I want to talk about aerospace and defense. That business is almost split equally for us between defense and commercial air. We literally work on applications from the ocean floor to land, to air, to space. And the common thing about those applications, our customers need incredibly ruggedized solutions. They need us to move data flawlessly in those applications, and they need power to be uninterrupted. And they need to count on the signal when it’s required at the right place for decades in some of these applications.”

“These 2 businesses, Digital Data Networks [cloud and AI] and Energy are benefiting from massive CapEx spending. In addition to that, we have opportunities to drive content growth. And it’s a combination of those factors that will drive outsized growth in these 2 businesses.”

“If you think about demand in Energy, it’s coming from new sources. It’s coming from sources like electric vehicles, from factory automation, from AI. Those things are straining our grid in ways like we’ve never seen before. And those innovations are outpacing our infrastructure. And we are at the cusp of decades-long of spending and capital in energy to keep up.”

“Connectivity solutions like our connectors and cables are a forethought in this design cycle and are an integral part of the AI architecture. This architecture is becoming incredibly complicated, and it varies between our different customers. And because of that, they’re coming to us early in this design cycle and we touch every part of the modern AI architecture. We are working with the hyperscalers and the silicon providers to address their issues with density, speed, heat and power. And our solutions touch every part of that architecture. That’s what’s driving content growth for us in this business. If you think about the need to win and what our customers are driving to win, they’re spending a massive amount of CapEx to make that happen. This year [2025], well over $400 billion will be invested in AI. That’s a 3x increase from where we were 3 years ago. Over that period, we’ve seen an increase in the available connectivity per chip go up 5x. That’s the content that has fueled our growth to $1.4 billion in AI and cloud. And it’s the combination of the pace of CapEx spending with our unique ability to innovate and scale. With that, I’m confident we’re going to more than double this [AI and cloud] business in the next 2 years. And I know you came to hear what were we going to say about AI and how are we going to grow? That’s it. We will double this business, more than double this business in the next 2 years with the pace that we’re on.”

“The first vector is design complexity. Our customers are building AI clusters with unique architectures. These unique architectures have different GPU configured counts. They have different network configurations. They have specialized power needs. Their needs are driving different problems, and they need to partner with us early in the cycle to address those. Earlier, I said co-creation was a competitive advantage for TE. Here [meaning AI], it’s next level. And I’ll tell you why. Our customers don’t come to us with the design spec because they don’t have them. They only know how they need their system to operate. So they need a partner that can collaborate with them, and that’s the adjustment that we’ve made. We collaborate with them. We offer design options. We offer them product options, and we help them architect their new solutions. And we work across their entire ecosystem to help them optimize their system performance. And we optimize that value chain in real time with them. The more uncertainty that they have about their architecture, the more we are iterating with them, and we’re doing this faster than ever. And one really important part of what we do with our customers is that our partnership spans design, prototyping and manufacturing. This is a key differentiator for us in this market. Next, I want to talk about pace. Pace has shifted down, as Terrence said, to left by probably more than 50%. Things that used to be 3 years are now a year to 18 months in terms of these cycles with our customers. And the complexity has increased because of the need for higher speeds, faster compute. This means more connections, and this means more precision and tighter tolerances. And we have responded to that by doubling our engineering capacity in AI. That allows us to provide around-the-clock support to iterate with our customers. And we’ve also put tools in place to improve our efficiency and accelerate our responsiveness for our customers. The result of those investments that we’ve made is last year, we delivered 4x our product innovation velocity. Next, I want to talk about manufacturing. This is no longer an afterthought for our customers. They think about manufacturing at the beginning of their design cycle because their ramps are near vertical, and their peaks are always changing. And they need partners that can move with them. To respond to their needs, we’ve doubled our manufacturing capacity. We placed it near where they need it to give them supply chain resiliency, whether that’s in China, China Plus One in Southeast Asia or whether that’s near where they need it in North America. We’ve deployed that scale and that capability. So we have proven this ability to simultaneously scale and adjust for our customers. And when you look at these 3 vectors, it’s hard for a supplier to do any one of these, but we do all 3. And we are one of the very few in the entire world that’s able to do all 3 of these in this market for these customers. And this is driving real impact for us. These aren’t just words on Shad’s slide. These have a financial impact. We delivered $900 million of growth from products that we didn’t produce 2 years ago.”

“Just as we’re in this new era of compute, we are fundamentally entering a new era for power. The first energy revolution was really probably kicked off more than 70 years ago with the invention of the transistor. Fast forward to where we are today, we’re in the second energy revolution, and it’s happening now. And it’s happening because of electronification of everything that I talked about earlier and because of AI. In the next 3 decades, the world will need to replicate the energy capacity that we spent the last 70 years putting in place. And while doing so, we’ll need to replace half of the aging energy assets. That is driving a multi-decade investment in energy capital.”

“And if there’s one thing that you take from today from what I told you, that one thing is that TE is uniquely positioned — absolutely uniquely positioned to benefit from what’s happening in AI and Energy.”

“Now in all of our regions, there are 3 megatrends that are shaping the next phase of transportation’s growth: data connectivity, electronification and e-mobility. All 3 of these megatrends are creating more content for us. We’re seeing more content, more electronics, more sensors, more high-voltage content in every vehicle.”

“Consistency is something we talk a lot about internally. Are we consistently doing these things [meet or beat guidance]? Have we earned the right to come to our owners, people in this room largely and to say, we’ve done what we’ve said we’re going to do. Can you rely on us to continue to do that?”

“We’re actually at 30% [market share in AI interconnect] right now today, we are. So from that viewpoint, when we view share, that’s where it is today.”

“We’re typically working out 2 to 3 generations with those [AI] customers on co-creating what that architecture looks like and being able to respond to that. So yes, there will be changes in the architecture on the next gen and the next one after that will be different as well. What I feel good about is the way we’re positioned with our portfolio of products, both at the signal side, at the power side and what we’re doing around the thermals that give us a lot of opportunity to add content in that rack. When you think about the optics piece, we’re playing — we’re working with them today on optics solutions. So I think no matter which way it goes, we will be there with them. One of the drivers with our customers that you should realize staying with copper is more advantageous for them because it’s more cost effective. We’re working really hard with them to continue to extend the life of copper through a lot of mechanisms around the architecture and making it more efficient. So I would say this is an architecture from an optics that feels like it’s moving more to the right than it’s — while other things are moving more to the left to optimize their solution. But either way it goes, I’m confident we have our teams positioned and working with them to capture that share and maintain or grow our share from there.”

“So I would just tell you that we feel good about the 6% to 8%. We think about that more in an organic model. There’s going to be times where we stretch above that because where we are with maybe inflection points in the next couple of years with where AI is or we do an acquisition, then all of a sudden you say, well, we’re at 10% or 11%. Well, that could be. But we’re trying to just kind of give some — people some baseline numbers.”

“We’re absolutely a leader in high-speed backplane connectivity for applications like low earth orbit satellites or even the whole infrastructure of thinking about inside of a plane or inside of a shift inside of a mobile vehicle that needs data to communicate between different machines. And there’s a standard there, and we’ve been inventing that standard. So we’re leading that space. If you think about on the AI side, again, I think there’s 3 factors that you have to have to differentiate in this space. When you think about the competitive set, and it’s a narrow competitive set. You have to have the technology, you have to have the agility to adjust with your customer and you have to have the ability to scale. I actually think those last 2 are becoming more important for our customers than just the technology. I think technology was the leader. But if you can’t do all 3 of those, you’re not going to grow with these customers.”