TE Connectivity's LGA Socket To Be Used In Intel Processors

Swiss-based manufacturer of electronics and sensors, TE Connectivity Ltd. (NYSE:TEL) announced that its LGA (land grid array) 3647 Socket would be used in Intel Corporation’s (NASDAQ:INTC) new processors per specifications under their new server platforms. The new socket will provide consistent connectivity for CPUs in high performance computing (“HPC”) and server platforms.

TE Connectivity’s LGA sockets provide a compressive electrical interconnect between the printed circuit board and the processor.

With higher computing power, processor chips’ pin counts are also on the rise. The new LGA 3647 socket is the first of its kind, with a two-piece design for the larger processor which delivers enhanced coplanarity and reliability in connectivity and also improves concerns with warpage.

The newest LGA 3647 socket thus addresses the state-of-the-art, robust design requirements for superior performance and advanced system scaling of Intel’s latest CPU processors.

TE Connectivity is one of two validated suppliers of this technology and thus has a strong foothold in the market for this essential socket which is used in data centers and HPC. In addition, the company can supply engineers with sockets at the initial stages of the design process, thanks to its flexible tooling which enables rapid turnaround on prototypes.

A market leader in the connectivity and sensor business, TE Connectivity boasts a comprehensive technology and product portfolio that helps it withstand economic distress and cyclical risks. The company has a dominant share in the connector market and is taking steps to increase penetration into products and end-markets where it has a limited presence.

However, this Zacks Rank #3 (Hold) company is presently struggling with several headwinds including softness in its Industrial Solutions segment stemming from the sluggishness in oil & gas and defense-related distribution. Moreover, a slowdown in China continues to put pressure on its operations.

We believe that the company’s prospects, though solid in the long term will be somewhat restrained in the immediate future, given the macro headwinds like weakness in the oil & gas end-market, currency volatility and weak industrial demand.

A couple of better-ranked stocks in the same industry are Fabrinet (NYSE:FN) and Stoneridge Inc. (NYSE:SRI) , both sporting a Zacks Rank #1 (Strong Buy).