TE Connectivity Ltd. (TEL): Business Model Canvas [Dec-2025 Updated]

You're digging into the core engine of TE Connectivity Ltd. (TEL), the industrial tech leader whose specialized components are defintely inside the biggest growth trends like AI and electrification. After running the numbers on their record-setting fiscal year 2025, the business model is crystal clear: it's a high-precision manufacturing powerhouse that generated $17.3 billion in net sales, all while churning out $3.2 billion in Free Cash Flow. The real insight is how they've strategically positioned themselves, pulling in over $900 million from AI-related applications alone. If you want to see exactly how a mature industrial firm captures next-gen revenue through deep engineering and strategic M&A, you need to examine the nine building blocks below.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Key Partnerships

You're looking at the structure that underpins TE Connectivity Ltd.'s growth engine, the partnerships that make the numbers move. Here's the data on who they work with to lock in future revenue streams.

Strategic co-development with hyperscaler platforms (AI/Data Center)

TE Connectivity showcased its role in enabling next-generation data centers at the 2025 OCP Global Summit in San Jose, California, in October.

• Liquid-cooled busbars support 300 kW to 400 kW racks, up from traditional air-cooled limits of 200 kW.
• Demonstrations included 448G/lane co-packaged copper (CPC) connectors and 1.6T optical and copper interconnects.
• The company is working with partners like Astera Labs on industry-first active backplanes.

Membership in the Responsible Business Alliance (RBA) for supply chain standards

TE Connectivity focuses on World Class Supply Chain Initiatives, aiming for continuous improvement in material flows and reduction of Total Acquisition Costs (TAC).

Collaboration with industry partners on Open Compute Project (OCP) architecture

TE Connectivity's portfolio is engineered for compatibility with OCP architecture, supporting scalability and power efficiency for AI/ML workloads.

Key suppliers for specialized raw materials (e.g., copper, plastics)

Analysis of product costs shows that raw materials, specifically copper, can account for nearly 65% of the cost of certain components. In one instance, a supplier sought a 30% cost increase, which was partially offset by a market decrease of 15% in copper prices. TE Connectivity has 85,000 employees, including 9,000 engineers, working alongside customers in approximately 130 countries.

Strategic bolt-on acquisitions, like Richards Manufacturing in April 2025

TE Connectivity completed the acquisition of Richards Manufacturing Co. on April 1, 2025.

The acquired business will be integrated into TE Connectivity's Industrial Solutions segment. For context, Industrial Equipment represented 30% of that segment's net sales in fiscal 2024.

Finance: draft 13-week cash view by Friday.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Key Activities

High-volume, high-precision manufacturing across a global footprint

TE Connectivity Ltd. (TEL) employs over 89,000 people, with more than 8,000 of those being engineers.

The company operates in approximately 130 countries.

Over 70% of TE Connectivity Ltd. (TEL)'s manufacturing is localized.

Full Year 2025 Net sales reached a record $17.3 billion.

Fourth Quarter 2025 Net sales were a record $4.75 billion.

Fourth Quarter 2025 Orders increased to $4.7 billion.

The Transportation segment delivered content growth from increased data connectivity and growth of the electrified power train in Asia.

Extensive Research and Development (R&D) in connectivity and sensors

TE Connectivity Ltd. (TEL) annual research and development expenses for 2025 were $0.829B.

This represented an 11.88% increase in R&D expenses compared to 2024.

Deep engineering collaboration and custom solution design for major OEMs

Industrial segment sales increased 24% during fiscal 2025.

Industrial segment organic growth for fiscal 2025 was 18%.

Aerospace, Defense, and Marine business sales grew 7% organically in fiscal 2025.

• Industrial segment sales growth driven by AI and energy customers.
• Transportation segment growth from electrified power train content.

Strategic portfolio management and bolt-on M&A (Mergers and Acquisitions)

TE Connectivity Ltd. (TEL) deployed $2.6 billion for bolt-on acquisitions in fiscal 2025.

In the first quarter of fiscal 2025, $325 million was deployed for bolt-on acquisitions in the Industrial segment.

The Richards Manufacturing acquisition was completed in the second quarter of 2025.

Operational efficiency programs to maintain 20% adjusted operating margin

Full Year 2025 GAAP Operating margin was 19%.

Full Year 2025 adjusted operating margin was 20%.

The adjusted operating margin expansion for fiscal 2025 was 80 basis points year-over-year.

Second Quarter 2025 adjusted operating margin reached 19.4%.

First Quarter 2025 adjusted operating margin was a quarterly record at 19.4%.

• Industrial segment adjusted operating margins expanded to over 20%.
• Transportation segment maintained adjusted operating margins of 20.7% in Q2 2025.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Key Resources

You're looking at the core assets that let TE Connectivity Ltd. (TEL) actually deliver on its promises. These aren't just line items; they're the engine room of their operation, especially as they push deeper into AI and energy infrastructure.

The human capital is significant. TE Connectivity Ltd. (TEL) relies on a deep bench of technical expertise. As of their fiscal year-end in September 2025, the company reported having approximately 93,000 total employees globally. A crucial part of this is the engineering talent; while the internal goal mentioned in planning was over 10,000, the reported figure shows 9,000 engineers working alongside customers. This specialized workforce is key to maintaining their position in complex, high-reliability markets.

The physical footprint is massive and strategically placed. TE Connectivity Ltd. (TEL) maintains a global manufacturing and distribution network designed for proximity to its customers. They operate in approximately 140 countries, and their direct selling efforts reach customers in about 130 countries. The company has manufacturing facilities and distribution centers spread across Asia-Pacific, Europe, the Middle East, Africa, and the Americas. This structure supports the required localization, which is stated to be over 70%.

Innovation is resource-intensive, and TE Connectivity Ltd. (TEL) backs it with capital. Their commitment to R&D is substantial, with the company investing over $740 million in fiscal year 2025 to fuel development in areas like next-generation transportation and energy solutions. This investment supports their extensive Intellectual Property (IP) portfolio, which is particularly strong in components designed for harsh environment applications. This IP includes trusted, ruggedized connector lines like DEUTSCH, which are market standards for demanding sectors like construction, agriculture, and electrified vehicle systems.

Finally, the financial strength of the company acts as a resource, providing flexibility for investment and resilience. For fiscal year 2025, TE Connectivity Ltd. (TEL) demonstrated strong cash generation, realizing a Free Cash Flow (FCF) of $3.2 billion. More precisely, the reported FCF for FY2025 was $3.214 billion, representing a 14.26% increase from the prior year. This robust cash flow conversion gave them the flexibility to return capital and fund growth.

Here's a quick look at the scale of these core assets:

• Engineering Talent: 9,000 engineers on staff.
• Global Footprint: Operations spanning approximately 140 countries.
• IP Focus: Extensive portfolio centered on harsh environment components.
• R&D Spend: Investment exceeding $740 million in FY2025.
• Cash Generation: FY2025 Free Cash Flow of $3.2 billion.

The interplay between the engineering talent and the IP portfolio is critical, as seen in their ongoing success with specialized products.

The company's ability to generate over $3.2 billion in FCF in fiscal 2025 means they can self-fund significant capital expenditures, like the increased capital investments mentioned to support industrial segment growth. [cite: 4 from first search] Finance: draft 13-week cash view by Friday.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Value Propositions

You're looking at the core reasons why TE Connectivity Ltd. (TEL) is capturing market share, and honestly, the numbers from fiscal year 2025 tell a clear story of essentiality across high-growth sectors. The value proposition isn't just about making parts; it's about being the indispensable link in complex, demanding systems.

Enabling high-speed data and power transmission for AI/ML workloads

The demand here is clearly translating into segment performance. The Industrial Solutions segment, which houses many of these high-speed and AI-aligned products, saw reported sales growth of 24% in fiscal 2025. This segment's adjusted operating margin hit a record 19.9% in the third quarter of 2025, showing that these advanced solutions carry strong profitability. The overall company's focus on these areas helped drive total net sales to a record $17.3 billion for the full fiscal year 2025.

Precision-engineered components for harsh environments (e.g., automotive, aerospace)

TE Connectivity Ltd. (TEL) is a global leader in connectors, estimated to hold 15-18% of the global connector sales market. Within the specialized Harsh Environment Connector Market, TE Connectivity and Amphenol Corporation collectively held over 30% revenue share in 2024, leveraging expertise in areas like aerospace and industrial applications. This focus on ruggedness is core to their DNA, even as the Transportation Solutions segment faced a slight headwind, with net sales decreasing by 1.0% in fiscal 2025.

High-content solutions driving growth in electric vehicles (EVs) and hybrid cars

The value here is in the increased 'content' per vehicle-more sophisticated components needed for electrification. The Transportation segment delivered content growth specifically from the growth of the electrified power train in fiscal 2025. This is a key driver, even if the overall segment sales declined slightly. The company's commitment to innovation to support this is evident in their R&D spend, which totaled $829 million in fiscal 2025, up from $741 million the prior year.

Miniaturization and reliability in sensor and connectivity solutions

Reliability underpins the entire business, enabling the company to achieve a record adjusted operating margin of 20% in fiscal 2025. The focus on smaller, more reliable components is what allows for the high-density solutions needed in modern electronics. This operational excellence resulted in record cash generation, with net cash provided by operating activities reaching $4.139 billion in fiscal 2025.

Standardized, high-power solutions for Open Compute Project (OCP) data centers

The data center market is massive, projected to reach $527.46 billion globally in 2025, with Network Infrastructure-where these high-power solutions reside-projected to hit $254.80 billion. TE Connectivity Ltd. (TEL)'s Industrial Solutions segment growth of 24% in fiscal 2025 is attributed to innovations serving the accelerating demand from the energy and AI sectors, which directly includes data center build-outs.

Here's a quick look at the financial results that validate these value propositions for the full fiscal year 2025:

The company returned $2.2 billion to shareholders and deployed $2.6 billion for bolt-on acquisitions in fiscal 2025, showing capital flexibility derived from these strong value drivers.

Finance: draft 13-week cash view by Friday.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Customer Relationships

You're looking at how TE Connectivity Ltd. (TEL) manages its connections with the companies that buy its components. This isn't just transactional; it's about embedding engineering support right where the customer designs.

Dedicated field application engineering support for co-design

TE Connectivity Ltd. (TEL) supports co-design through a significant technical workforce. The company has over 9,000 engineers working alongside customers in approximately 130 countries. This deep technical bench is crucial for integrating complex solutions early in the design cycle. For instance, the median salary for a Staff Field Application Engineer in the US, based on H1B data, was $132,500 in 2025. In the US, the average annual pay for a TE Connectivity Ltd. (TEL) Field Application Engineer was reported as $128,200 as of late October 2025. This investment in technical personnel underpins the consultative approach.

Deep, long-term relationships with major global Original Equipment Manufacturers (OEMs)

The scale of TE Connectivity Ltd. (TEL)'s business reflects the depth of these relationships. Full fiscal year 2025 net sales reached a record $17.3 billion on a reported basis, representing an 8.9% increase from fiscal 2024. The company has strategically positioned its manufacturing base, with over 70% of its production localized, which serves as a differentiator with customers. The Transportation Solutions segment, a key OEM-facing area, saw its net sales decrease by 1.0% in fiscal 2025, while the Industrial Solutions segment grew net sales by 23.7%.

High-touch, consultative sales for complex, customized solutions

Consultative sales are evident in the high-growth, specialized areas. TE Connectivity Ltd. (TEL) secured a substantial 30% market share in the critical AI connectivity space. Revenue related to Artificial Intelligence exceeded $900 million for the full fiscal year 2025. This type of specialized component sales requires a high-touch engagement model rather than simple catalog ordering. Furthermore, the Industrial Solutions segment saw its sales jump by 24% in FY2025, driven by markets like digital data networks, where organic growth in Q4 2025 was 80%.

Maintaining a trusted innovation partner status with key customers

The focus on innovation solidifies the partner status. The company generated record adjusted earnings per share (EPS) of $8.76 and a record adjusted operating margin of 20% for the full fiscal year 2025, demonstrating the value captured from these deep engagements. The company generated a record $3.2 billion in free cash flow in 2025, showing the financial strength derived from these core partnerships. They also deployed $2.6 billion for bolt-on acquisitions, which often serve to enhance capabilities for key customers.

Standardized self-service for catalog products via distribution

While the focus is on custom engineering, a portion of the business relies on standardized sales. The company operates globally, with employees in approximately 130 countries, which necessitates a broad distribution network to handle catalog sales efficiently. The overall business structure supports both the high-touch engineering and the standardized product fulfillment.

The following table summarizes key financial and operational metrics that frame the scale of TE Connectivity Ltd. (TEL)'s customer relationships as of late 2025.

Finance: draft 13-week cash view by Friday.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Channels

You're looking at how TE Connectivity Ltd. (TEL) gets its products-connectors and sensors-into the hands of its global customer base as of late 2025. The strategy relies heavily on direct engagement for the biggest accounts, supported by a broad distribution network for everything else.

The company's reach is massive, with products sold into approximately 130 countries. For fiscal year 2025, TE Connectivity Ltd. (TEL) achieved record net sales of $17.3 billion. This scale requires a multi-pronged channel approach.

Here's a quick look at the structure, using the latest available channel split data:

The direct sales force is the core engine for major design wins. This team works closely with the largest Original Equipment Manufacturers (OEMs) in the Transportation and Industrial Solutions segments. For instance, the Industrial Solutions segment saw sales increase 24% in fiscal 2025, partly driven by demand in AI and energy, which requires deep, direct engineering collaboration. This direct engagement is crucial for capturing high-content opportunities, such as those in electrified powertrains and data connectivity within vehicles.

For the rest of the market, the global network of authorized distributors handles volume for smaller customers and the MRO business. This channel provides necessary scale and local inventory for less complex or immediate needs. While the exact percentage for 2025 isn't public yet, the 2024 figure suggests this channel accounts for about 20% of net sales.

TE Connectivity Ltd. (TEL) heavily supports its sales efforts through digital means. You'll find extensive resources available online:

• Online product catalog and technical resource portals for self-service design and procurement.
• Access to detailed specifications for their broad range of connectivity and sensor solutions.
• Support for customers designing for high-growth areas, like the AI revenue stream which is forecast to exceed $800 million in fiscal 2025.

Furthermore, direct engagement at industry consortiums and trade shows remains a key channel for thought leadership and future pipeline development. The company highlighted its presence and innovation in areas like Open Compute Project (OCP) relevant technologies, which feed into the Digital Data Networks business that grew over 80% organically in Q3 2025. This high-touch engagement complements the transactional nature of the distributor channel.

The success of these channels translated into strong financial results for fiscal 2025, with record adjusted operating margins at essentially 20% and record free cash flow of $3.2 billion. The Q4 2025 results showed net sales of $4.75 billion, up 17% reported year-over-year, indicating the channels were effectively moving product even in an uneven macro environment. Finance: draft Q1 2026 channel performance review by February 15th.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Customer Segments

Transportation Solutions customers include global automotive OEMs, with a focus on EV/electrification trends, and commercial transportation operators. For the fiscal year ending September 26, 2025, net sales for the Transportation Solutions segment decreased by 1.0% compared to fiscal 2024. In the third quarter of fiscal 2025, Transportation Solutions generated net sales of $2,413.00 million.

Industrial Solutions serves a diverse set of end markets. This includes hyperscale data centers driving AI/Cloud infrastructure, energy infrastructure projects, and factory automation systems. For the full fiscal year 2025, Industrial Solutions net sales increased by 24% year-over-year. In the third quarter of fiscal 2025, Industrial Solutions reported net sales of $2,336.00 million. Specifically, revenues tied to Artificial Intelligence are projected to surpass $800 million for fiscal 2025. The Digital Data Networks business within this segment saw organic growth of over 80% in the third quarter of fiscal 2025.

Further Industrial Solutions customer groups requiring high-reliability components include those in medical devices, aerospace and defense, and subsea communications. The Industrial Solutions segment's growth in fiscal 2025 was driven by sales in digital data networks, energy, automation and connected living, and aerospace, defense, and marine end markets.

TE Connectivity Ltd. (TEL) serves global customers across approximately 130 countries. The company employs approximately 93,000 people to support these global operations. These customers consistently require high-reliability, mission-critical components for their applications.

The total net sales for TE Connectivity Ltd. for the twelve months ending September 30, 2025, reached a record $17.262 billion, representing an 8.94% increase year-over-year.

Here's a quick look at the segment revenue performance for the third quarter of fiscal 2025:

The customer base is characterized by a demand for components that perform under stress, which is reflected in the company's focus areas:

• Global automotive OEMs and electrification projects.
• Hyperscale platforms driving AI infrastructure.
• Energy infrastructure build-out.
• Aerospace, defense, and marine systems.
• Medical device manufacturing.

The company's fiscal fourth quarter 2025 net sales were a record $4.75 billion.

Finance: review the Q4 2025 customer order book by end market by next Tuesday.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Cost Structure

You're looking at how TE Connectivity Ltd. (TEL) structures its spending, which is heavily weighted toward making things at scale. This is definitely a cost-driven structure, meaning efficiency in manufacturing is paramount to maintaining margins.

The largest single cost component is the Cost of Goods Sold (COGS). For the full fiscal year ended September 27, 2024, COGS totaled $10.389 billion, against Net Sales of $15.845 billion for that same period. This massive cost base is directly tied to the materials TE Connectivity Ltd. uses.

The materials themselves drive a significant portion of that COGS. You're dealing with inputs like:

• Plastic resins for molding
• Precious metals such as gold, silver, and palladium for plating
• Base metals including copper, aluminum, brass, and steel for components

The prices for many of these inputs are subject to global supply and demand, which means cost management is a constant battle against inflation and availability issues. Honestly, when you buy that much metal and polymer, you feel every tick in the commodity markets.

Fixed costs are substantial, rooted in the global footprint and necessary future-proofing investments. Global manufacturing requires significant overhead, and R&D investment is non-negotiable in their technology-focused segments. For the fiscal year 2024, Research, Development, and Engineering expenses were $741 million. Looking ahead, the projected R&D spend for the twelve months ending September 30, 2025, was estimated at $829 million, showing continued investment.

Operating expenses (OpEx) cover the day-to-day running of the business, which includes managing external pressures. For the full fiscal year 2024, Selling, General & Administrative expenses were $1.732 billion. A key OpEx consideration is managing the fallout from global trade volatility. TE Connectivity Ltd. explicitly notes exposure to costs from supply chain disruptions and potential tariff impacts, which management must actively navigate to protect profitability.

To support growth, especially in the Industrial segment, capital expenditure (CapEx) remains a focus. This investment in physical assets shows a commitment to capacity expansion and efficiency improvements. Here's a snapshot of recent investment activity relative to operating performance for the most recent quarter available:

The CapEx-to-Operating-Income ratio for that quarter was approximately 0.26, indicating a notable level of reinvestment relative to current operating profit. That's how you build for the next cycle.

TE Connectivity Ltd. (TEL) - Canvas Business Model: Revenue Streams

TE Connectivity Ltd. (TEL) revenue streams are fundamentally driven by the sales of connectivity and sensor products across its two primary reportable segments: Transportation Solutions and Industrial Solutions.

Total Net Sales reached a record $17.3 billion in fiscal year 2025, marking a 9% increase on a reported basis and a 6% increase organically year-over-year.

The Industrial segment was a major driver of this growth, with reported sales increasing by 24% during the year, benefiting from bolt-on acquisitions, and achieving 18% organic growth. This segment's results included delivery of high-speed connectivity solutions into AI applications.

The Transportation segment delivered sales growth despite an uneven global vehicle production environment, capitalizing on long-term trends. This growth was fueled by content-per-vehicle growth from increased data connectivity and the growth of the electrified power train.

Inorganic growth was significant, with TE Connectivity Ltd. deploying $2.6 billion for bolt-on acquisitions in fiscal year 2025. The acquisition of Richards Manufacturing Co. was completed in the third quarter for $2.3 billion, a business noted as being a ~$400 million operation generating double-digit revenue growth.

You can see the key financial metrics related to the full-year performance here:

The revenue generation is tied directly to the performance within the segments:

• Sales of connectivity and sensor products across the Transportation Solutions segment.
• Sales of connectivity and sensor products across the Industrial Solutions segment.
• Revenue contribution from recent bolt-on acquisitions, such as the Richards Manufacturing Co. deal.
• Growth driven by specific technology adoption trends:

• Delivery of high-speed connectivity solutions into AI applications.
• Strength in electrification and next-generation vehicle data connectivity within Transportation.
• Growth in the energy business within Industrial.

Finance: draft 13-week cash view by Friday.