The connector landscape is undergoing a major transformation: from "component manufacturing" to the ultimate battle of "AI computing power system integration".

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The connector industry is standing at a historic turning point, shifting from "automotive-driven" to "AI-driven."

TE Connectivity, relying on its leading position in automotive connectors, has long held the top spot in the global connector industry since 1980. However, in 2025, this pattern, maintained for forty-five years, was completely rewritten—Amphenol’s annual revenue reached $23.1 billion, up 52% year-on-year, with IT Datacom revenue share soaring from 24% in 2024 to 36% in 2025, the absolute amount surging from $3.65 billion to $8.31 billion. Driven by explosive demand for high-speed connections in AI data centers, Amphenol officially overtook TE, ascending to global number one in the connector industry. The industry’s growth engine has shifted from “who has a bigger automotive segment, who has a more stable industrial segment” to “who has a higher revenue share in AI Datacom, who can provide more comprehensive high-speed interconnect solutions, who can quickly turn AI demand into revenue.”

I. What happened? Industry landscape reshaped

The connector industry is standing at a historic turning point, shifting from "automotive-driven" to "AI-driven."

In 2025, Amphenol’s Communication Solutions division revenue grew 91% year-on-year, with annual revenue nearly doubling compared to $12.555 billion in 2023. In the first quarter of 2026, LME Copper prices firmly stood at $12,000/ton, reaching a five-year high, and connector manufacturers intensively started price pass-through. Leading producers like TE and Molex successively announced price adjustments. Upstream cost pressures rapidly transmitted downstream, marking the official start of the connector industry’s “cost reshaping period.” Meanwhile, the global connector market in 2026 is expected to exceed $95.7 billion, with annual growth of about 5–7%, and China’s market share continues to rise.

Amphenol’s FY2025 annual revenue is $23.1 billion, up 52% year-on-year; Q4 revenue is $6.439 billion, up 49% year-on-year. The explosive demand for high-speed connectors in AI data centers is the main growth driver, with Communication Solutions division revenue up 91% year-on-year. The company expects Q1 2026 sales to be between $6.9–7 billion.

More importantly, Amphenol’s IT Datacom revenue share jumped from 24% in 2024 to 36% in 2025, with absolute revenue surging from $3.65 billion to $8.31 billion. This structural change means AI data centers have replaced traditional automotive and industrial, becoming the largest incremental market for connectors. Amphenol’s 2025 revenue nearly doubled compared to 2023, with a leap in profitability, completely breaking previous growth bottlenecks and entering a new phase of high-quality growth.

Amphenol clearly stated in its annual report that sales growth in 2025 was mainly driven by strong organic growth in the IT Datacom market, especially in AI-related applications. The company’s 2025 capital expenditure increase is mainly to support strong IT Datacom growth, and it explicitly states this growth is related to AI applications. The connector industry is no longer just an “end-user electronic component track,” but increasingly part of the “computing power infrastructure track.”

In the first quarter of 2026, the global commodities market underwent sharp changes. LME copper prices firmly stood at $12,000/ton, setting a five-year high. As a core manufacturing material for connectors, fluctuations in copper costs quickly passed downstream.

Core raw materials like copper, gold, and silver continued to surge in price, with LME copper breaking $13,300/ton in early January 2026, up more than 20% over the average price at the end of 2025, driven by tight inventories and strong industrial demand. Domestic copper prices rose from ¥69,500/ton in March 2025 to ¥78,200/ton, a 12.5% increase. International copper prices surpassed $11,705/ton, and domestic prices even broke the ¥110,000 mark.

Against the backdrop of rising raw material costs, connector manufacturers started intensively activating price pass-through mechanisms. TE, Molex and other leading producers announced price adjustments, launching another round of price hikes. Costs throughout the connector supply chain continued to increase. Despite some retreat from historic highs, the current surge in precious and base metal prices is essentially driven by new demand from AI infrastructure construction and electrification waves. The connector industry is entering a “cost reshaping period,” and companies with cost control and product mix adjustment abilities will prevail in this cycle.

II. Why is it important? Simultaneous migration of demand, product, and revenue

① In 2025, the connector industry’s growth engine has migrated from traditional end-user demand—automotive, industrial, consumer electronics—to computing power infrastructure demand such as AI data centers, cloud, and networking equipment.

Past industry growth depended on automotive electrification and intelligence, industrial automation, consumer electronics upgrades, and routine communication equipment upgrades. TE’s FY2025 revenue structure still reflects this “old pattern”: its biggest segment is Transportation Solutions, making up 54% of FY2025 revenue; Industrial Solutions accounts for 46%. Amphenol’s annual report states directly: 2025 sales growth is mainly driven by robust organic growth in IT Datacom, particularly in AI-related applications.

From a more detailed product perspective, the sharp rise in the use of ASIC chips boosted copper connection ratios; in 2025, ASIC-related demand in cabinet connectors made up 18% and is expected to jump to 38% in 2026. Leading cloud providers like Amazon, Meta, and Microsoft use significantly more copper connections in their ASIC clusters, setting industry benchmarks. In 2025, high-speed connection hardware accounted for 18% of global data center capital expenditures, and the deployment of 5G-A networks by China’s three major operators further drove demand for high-frequency, high-speed connectors. Among downstream applications, telecom infrastructure accounts for the largest share (42%), but demand for AI servers is growing fastest, expected to hit 28% in 2025.

② Product value migration: From ordinary connectors to system-level interconnect solutions

Migrating from ordinary connectors, traditional terminals, and low-speed interconnects to high-speed connectors, copper cable assemblies, fiber optic interconnects, power interconnects, and other system-level interconnect solutions. The essence of this migration is a significant rise in unit value and system complexity.

AI infrastructure requires higher density, bandwidth, power, and reliability for interconnects. Compared with traditional endpoints, the interconnect demands of AI servers and switching networks focus more on high-speed board-to-board connections, high-speed copper cable assemblies, fiber optic interconnects, power interconnects, rack level, and system-level cabling. Amphenol’s 2025 annual report describes its IT Datacom products as covering high-speed products, power products, fiber optic interconnect products, and notes that AI-related applications are a major growth driver here.

TE’s FY2025 data also confirms this trend: its digital data networks business within Industrial Solutions earned $2.208 billion in 2025, accounting for 28% of the industrial segment, noticeably up from 20% in 2024 and 18% in 2023. The weight of data network interconnect in TE’s industrial segment is rising quickly.

High-speed interconnects, cable assemblies, and fiber optical links are generally driven more by architecture upgrades than traditional low-speed connections, and scale up in sync with the density of computing power. Amphenol’s increased capital expenditure in 2025 is to keep pace with this type of demand expansion, not to expand mature traditional lines.

③ Revenue center migration: Companies with high AI exposure benefit most

After centers of demand and value migrate, industry revenue centers start to concentrate on companies with high AI exposure. Whoever is closest to AI is more likely to capture the largest increment in 2025.

Amphenol’s 2025 revenue is $23.108 billion, up 52% year-on-year; TE’s FY2025 revenue is up 8.9% y-o-y—the difference directly reflects this migration result. The migration of the industry growth center will ultimately show in company growth rates and market share differences. The biggest industry growth in 2025 will no longer be determined by who has the biggest automotive or most stable industrial segment, but rather by “who has a higher share of revenue in AI Datacom, who can offer the most comprehensive high-speed interconnect solution, who can turn AI demand into revenue faster.”

Amphenol’s high growth in 2025 is not just due to better execution but because it stands at the center of new industry growth. TE also benefits from AI, but AI’s weight in the entire company hasn’t reshaped the revenue curve as much as Amphenol. The migration of the industry’s growth center in 2025 is not just simple downstream rotation, but simultaneous change on three levels: demand shifts from traditional endpoints to AI computing power infrastructure, products migrate from ordinary connectors to system-level high-speed interconnects, and revenue concentrates in companies with higher AI Datacom exposure.

III. What to watch next? Cost volatility and competitive landscape

Metal prices for copper, gold, silver, etc., are the most crucial variables in connector industry cost structure. According to estimates, for typical wire, raw materials make up about 50–60% of manufacturing cost, with copper accounting for more than half—the rest includes plastics. Nickel, less talked about, is also required for some wires.

In early 2026, LME copper prices firmly stood at $12,000/ton, a five-year high. Against the backdrop of soaring copper prices, connector manufacturers are actively responding: first, passing on cost pressure to downstream customers through price transmission; second, optimizing product structure to increase the share of high-margin products; third, lowering manufacturing costs by automation and technical upgrades. Electroplating with gold as a bulk commodity is now mostly passed on to customers, and copper price strategies differ in negotiation depending on specific customer targets. The closer to upstream (terminals, bare wire, bulk wire producers), the more reactive to copper prices; connector producers compete not on routine quarterly price cuts, but rely on product mix adjustment for gross margin.

China is the world's largest connector manufacturing base, but high-end products are still dominated by firms from Europe, America and Japan. In 2025, China’s connector market is expected to account for over 35% of the global share; key domestic firms include Luxshare Precision, AVIC Optoelectronics, Derun Electronics, Sunway Communication, Changying Precision, etc.

In the field of high-speed connectors for AI data centers, Luxshare Precision and Foxconn Interconnect Technology have already formed strong competitiveness. Foxconn Interconnect introduced the industry’s first 102.4Tbps CPO connector, marking that Chinese firms now possess globally leading optical interconnect technology. AVIC Optoelectronics’ optical connector business grew 28.74% year-on-year, while its data center business doubled, blossoming in multiple emerging civil sectors.

The connector industry is undergoing a paradigm shift from “automotive/industrial driven” to “AI driven,” which we divide into four stages:

Stage 1 (2022–2024): AI demand germination period. With the popularization of NVIDIA H100, AI servers’ demand for high-speed connectors became increasingly visible. Amphenol and other industry leaders benefited first, TE still anchored to automotive as its base.

Stage 2 (2025–2026): AI-driven acceleration and landscape reshaping period (current stage). AI data center demand explodes, Amphenol’s IT Datacom revenue share rises from 24% to 36%, officially overtaking TE as global number one. The industry growth engine shifts from “who has the biggest automotive segment” to “who has the highest share in AI Datacom.” In 2025, Amphenol’s annual revenue nearly doubles compared with 2023, validating the huge elasticity of the AI interconnect track. We are now in the core acceleration period of this stage.

Stage 3 (2027–2029): Maturity of system-level interconnect platforms. System-level solutions for high-speed connectors, copper cable assemblies, optical fiber interconnects, and power interconnects become standard industry practice. Companies with full-stack interconnection capabilities gain excess returns, and industry concentration rises further. CPO, silicon photonics, and other new technical routes enter commercialization, optical interconnects become new growth poles.

Stage 4 (post-2030): Maturity and globalization of AI interconnect ecosystem. The connector industry forms a multipolar landscape of “Amphenol and TE as dual leaders, Luxshare Precision/Foxconn Interconnect and other Chinese manufacturers catching up.” AI interconnect becomes the biggest segment of the connector industry; emerging applications like humanoid robots, low-earth-orbit satellites contribute incremental growth.

The core conclusions are as follows—

Conclusion 1: Amphenol overtaking TE as global number one in 2025 is a landmark event, marking the migration of the industry’s growth center from “automotive-driven” to “AI-driven.” By raising IT Datacom’s revenue share from 24% to 36% and nearly doubling annual revenue versus 2023, Amphenol validated the huge elasticity of the AI interconnect track. This change is not just a short-term fluctuation but the start of a long-term industry trend.

Conclusion 2: Explosive demand for AI data centers is reshaping the connector industry across three dimensions: demand, product, and revenue. Demand has shifted from traditional endpoints to AI computing power infrastructure; products migrate from ordinary connectors to system-level high-speed interconnects; revenues concentrate in companies with higher AI Datacom exposure. Companies with full-stack interconnect capabilities will continually gain excess returns through this cycle.

Conclusion 3: Amphenol, through continued mergers and acquisitions, has built an “AI interconnect full-stack platform” of high-speed, cable, and fiber—better suited to AI era interconnect needs than TE. The $10.5 billion acquisition of CommScope CCS enhanced fiber optic interconnect abilities, while the Trexon acquisition strengthened high-reliability cables and interconnect components. Amphenol’s strategy is to continually focus capabilities on the AI interconnect track, while TE’s asset structure remains more scattered, making Amphenol better placed to capitalize on AI dividends.

Conclusion 4: Chinese connector manufacturers have already formed robust global competitiveness in high-speed AI data center connectors. In 2025, Luxshare Precision’s revenue exceeded ¥332.3 billion (+23.64%), Foxconn Interconnect released the industry’s first 102.4Tbps CPO connector, and AVIC Optoelectronics’ optical connector revenue rose 28.74%. Domestic connectors in defense, new energy vehicles, and data centers have taken over 30% of the high-end market—local substitution is accelerating.

Risk Warning and DisclaimerThe market entails risk, investment needs caution. This article does not constitute individual investment advice, nor does it consider specific investment goals, financial status, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article fit their individual circumstances. Invest at your own risk. ```