It’s one of those companies that we actually don’t compete with them very much, very little, actually. It’s such a complementary company, but I’ve always admired the company. And we’ve always admired the company for their great technology, fabulous people. And I’ve known some of the people at CIT also for many, many years. And I just can’t tell you how happy I am, that they’re going to be on our side of the table, but they’re going to join the Amphenol family. And that’s really just – it’s such a fabulous organization inside of CIT. I mean what we really love about this company, they are a true leader in the technologies around wire and cable, in cable assemblies, in contact technologies, which is just so complementary to our leadership position on connectors and other value-add Interconnect on things like backshells and the like.
And when we bring that together, that offering to customers whether that’s in the Commercial Air market, whether that’s in the Defense market, whether that’s in certain segments of the Industrial Market where they participate, we will be able to bring a total solution to those customers at a time when those customers really want to have reliable partners. I mean you think about some of the dynamics that are evident, for example, in Commercial Air, the reliability of your partners is an enormous premium in these things. I mean you’re making critical devices, airplanes that hundreds of passengers go on and being able to go to one company and say, can you bring us a total set of solutions for our interconnect needs, that has a really, really wonderful and comforting dynamic for the customers.
In terms of the profitability, CIT is a great company. It is operated in a bit of a holding company structure. I can tell you that we, in Amphenol, have a lot of different sister companies, brother companies around the world who have figured out lots of tricks of the trade of accessing low-cost manufacturing of helping to reduce the supply chain and all of that. And while the CIT team, they’re going to still run this company. It’s not like we’re going to parachute a bunch of folks into CIT and say, go run it on their behalf. It’s the quite the contrary. I mean, the existing management team is going to stay running that company as part of Amphenol, but they will be able to avail themselves of experience of collaborative interactions with folks around Amphenol that in our experience, ultimately leads to better performance.
We’ve had a good track record and some may call it a great track record of buying companies that were great companies with great technology, great people, that just were maybe part of the wrong parent company, all the way back to early 19 years ago when we acquired Teradyne Connection Systems from Teradyne Corporation. Again, Teradyne is an outstanding company in the test and measurement industry, but they were not an interconnect company. When we acquired the Advanced Sensors business from GE, and again, GE is an outstanding company. And just as you know, they focus now, and it’s now GE Aerospace, it’s a wonderful company, but they were not an interconnect company. And here again, with MTS, the company that we acquired in 2021, another example of a great company that ultimately was not an interconnector in that case, a sensor company.
I think as part of now an interconnect company where they really belong, I have really high hopes long-term for the progress that the CIT team will make. This will not come overnight. There’s no doubt about it. That takes time. And we’re patient in that respect, but we’re very hopeful and we have really a strong vision for the future of this company as part of the Amphenol family.
Operator: Thank you. Our next question is from Wamsi Mohan with Bank of America. You may go ahead.
Wamsi Mohan: Yes. Thank you so much. Adam, maybe back to this AI topic a little bit. Thanks for all the color you shared. Clearly, Amphenol has been in this space for a long time, and you continue to push the envelope both in terms of data speeds and signal integrity issues. So, can you just talk about how you’re seeing pricing evolves, maybe generation to generation? What’s been the history there? How are you anticipating that given the higher value and kind of much more – transmitting 800 gig instead of 400 gig speeds? So clearly, there’s value in there, but the density of applications is becoming more complicated and the unit volumes are also growing kind of order of magnitude higher. So putting all those together, how should we think about just the opportunity here?
Is it right to think about maybe – you just – you’re guiding to like a 30% growth in this end market right here in the next quarter. Is that something that’s possible to continue into 2025? Thank you so much.
Adam Norwitt: Well, thanks, Wamsi. A lot wrapped up in that question. I mean, look, I guess, to the very end of your question, I’m not going to get out ahead of myself and try to give a guidance about this revolutionary thing into 2025. As you know, we give guidance for the quarter ahead of us, and then we try to make sure we’re maximizing our position of whatever the market will bring us long term. But I would say this, number one, you mentioned pricing. I mean we are always trying to deliver to our customers’ value and so our goal is to deliver the maximum amount of value to our customers at the lowest price that they can get. And if we can deliver enough value to our customers, then there will be some of that value left over for us.
And I think what you see in AI is the criticality of the interconnect in these systems. I mean there is a direct correlation between the power of these AI learning and inference models and the quality and performance and capability of the interconnect systems because, again, you’re talking about speed and latency. And so when you think about how long does it take to build a model, well, if you have even the tiniest proportion of higher latency between the chips then all of a sudden, what may take a month, takes three months to build these complex models that are using trillions of learning factors across them. And if you take three months and your competitor takes 1 month, and your model is more up-to-date than your competitors, all of a sudden you as a service provider are not able to monetize these massive investments that you’re making.
