WOERT, Germany : The shift to electric cars may pose an existential threat to suppliers of combustion engines but for auto parts firms such as TE Connectivity the challenge is keeping up with demand.
And that's why it's on the lookout for acquisitions or partnerships to keep expanding its auto business, Chief Executive Terrence Curtin told Reuters:"We're going to continue to add capacity." Auto parts account for over 40per cent of TE's $15 billion in revenue, making it one the biggest car suppliers most people have never heard of. Its $43 billion market value is far bigger than Nissan and Renault combined - and more than three times heavyweight supplier Continental.
The challenge TE faces is getting the timing and scale of its expansion right, given the EV transition and shift to self-driving cars could run into speed bumps, such as an end to subsidies or safety concerns, Curtin said.The far greater power needed by EVs means TE must develop larger and more complex components to handle the extra current, without causing fires.
TE also makes a large connector here that sits atop an EV battery module - an EV has up to 12 modules - and serves as its brain, measuring each battery cell's performance while a tiny semiconductor measures their temperature."We're going to need more," said Matthias Lechner, TE's head of Europe, Middle East and Africa, adding that TE planned to manufacture more at a plant in Hungary and elsewhere.
Europe's auto supplier market will grow to 330 billion euros in 2030 from 216 billion now, driven by software, EVs and electronics, McKinsey estimates, as firms tackle chip bottlenecks and cost pressure while investing in growth.TE's Woert site employs 2,200 people and is adding more engineers and technicians, as well as different machines to make connectors for data in self-driving cars - because unlike EV parts, tiny connections are better for moving data.