So, the content of 4% to 6% hasn’t changed. Our view of what EV adoption does for our content on a full battery electric it’s about 2x, on a plug-in hybrid or hybrid is about 1.5 times are normal $70 that we would have on a nice vehicle, hasn’t changed. And I think what’s really great is our global business is really making sure we’re bringing the innovation to life, and also serving our customers with their innovation to make it happen.
Sujal Shah: Okay. Thank you, Chris. Can we have the next question, please?
Operator: Thank you. Our next question comes from the line of Steven Fox from Fox Advisors. Please go ahead with your question.
Steven Fox: Hi, good morning. I was wondering if you could just dig into the Schaffner acquisition a little bit more in terms of what it adds to the industrial portfolio and what kind of sales and margin profile we should expect going forward from it? Thanks.
Terrence R. Curtin: Yes. Thanks Steven, good morning. And Heath and I’ll hamming, this one. So, first off Schaffner, when we talk about bolt-on M&A for us is where areas that around areas we really want to be focused on from an application, we can drive value for our customers, but also can we acquire things that drive value for you as owners? And Schaffner is a great example of it. It is going to be in the factory automation space. Schaffner was a Swiss company and one of the things they do there, one of the global leaders in electromagnetic filter solutions and to keep it simple, it really is how do you have filters that when you’re bringing power into factory automation application through the motors and the drives, you really keep that pure from interference.
We already had a product line that did this. It was very much a U.S. product line with Schaffner, they were shown in Europe had a nice Asia presence and it really brings it together and that gets us deeper into factory automation. The revenue of it is about $40 million a quarter. It is something that we will improve the profitability up to the levels that we say. And Heath, I don’t know if you want to add more to it.
Heath Mitts: No. I think Steve this is right down the middle of the fairway in terms of how we look at bolt-on deals and I kind of compare it and similar to the ERNI acquisition that we did in 2022 which was another industrial — another business that rolled through our Industrial Equipment business unit within that segment. From a — although it’s going to contribute $40 million a quarter or so out of the gate, our focus is obviously driving where the value creation opportunity is and that’s on getting the cost structure in-line with where we would think about things in a TE world as well as really focusing on the cash on cash return here. It’s not going to be contributing much to EPS in the first year, no different than ERNI did, but following a similar trajectory to ERNI, it does really fit well within our margin expansion strategy and our ability to create cash on cash returns for our shareholders.
So, I’d say in general it’s, these are the nice size of deals we’d like to do and it’s a fragmented space still, so there’s still opportunity to add things in this space, even if we have absorb some dilution in the margins at the segment level.
Sujal Shah: Okay. Thank you, Steve. Can we have the next question, please?
Operator: Thank you. Next question comes from the line of Joe Giordano from TD Cowen. Please go ahead with your question.
Joe Giordano: Hi, guys. Good morning.
Terrence R. Curtin: Hi, Joe. Good morning.
Joe Giordano: Hi, I just want to ask on the AI side within Communications. So you mentioned you have like a 50% content lift in these AI type applications now. I’m just curious how much of what’s being built for AI is simply replacing stuff that otherwise would have been built before AI? So it’s like, if you’re doing $200 million of AI related content in 2024, is that essentially like replacing what would have been like $133 million of content of older type stuff and like the more of than last year?
Terrence R. Curtin: So couple of things, Joe. What you’re talking about is more cannibalization that goes into where capital gets deployed. I would say you’re still going to see servers deployed that will support AI. What we’re trying to really get out there is, what is the increased content to support the workload? So when you sit there, I won’t assume that it completely cannibalizes everything, but what’s really nice with the innovation that we bring and how these workloads are set up on the GPUs and the TPUs, it really creates a higher revenue level that we expect as AI continues to ramp. And when you think about our year and I said it on the call early on, we think we’re about $200 million this year of AI revenue. It will continue as program launches occur, build throughout the year and probably 60% plus will be in the second half versus what’s in the first half. And we’ll get the growth in our Communications segment in the second half of our year.
Sujal Shah: Okay. Thank you, Joe. Can we have the next question, please?
Operator: Thank you. Next question comes from the line of Samik Chatterjee from J.P. Morgan. Please go ahead with your question.
Samik Chatterjee: Hi, thanks for taking my question and Happy New Year as well. I was actually going to follow-up on the previous question on Communication and AI. You’re now indicating a $200 million contribution from the AI piece of the business, you raising that, I mean, now from $150 million. What’s the driver of the raise? Is it more capacity or demand? And then you’ve talked about a $1 billion order booked in the past. How has that pipeline continued to expand? And as you see that revenue come through, what are the implications on margins for the Communications segment? Thank you.
Terrence R. Curtin: So, hi, Samik, thanks for the question. First off being when you look at that it is the increased element is demand and wins. To the second part of your question the $1 billion is in excess of $1.3 billion. So, we continue to have momentum on that. And as Heath, sort of said, when we think about margins as that comes in, we’re going to be in the high-teens for that segment. So, even on a little bit lower revenue than we said before, we’re going to be in the high-teens this year in the Communication segment as that comes in.
