July 2026 Interconnect, Passives and Electromechanical Components Market Insights

Edgewater Research’s most recent IP&E update indicates that the broader market recovery is strengthening and that AI momentum continues to build.

This July 2026 collection of news summaries, survey results, and channel market insights, covers Interconnect, Passives, and Electromechanical Components from Edgewater Research. 

What’s Changed/What’s New?

1. Broader demand trends continue to improve. 2Q finishing broadly ahead, with double digit Q/Q growth across several end markets.
2. B2B improving to ~1.3x vs 1.2x in 1Q. 3Q trends pointing to better-than-seasonal shipments and incremental pricing tailwinds.
3. Amphenol likely to retain overwhelming majority of Nvidia backplane share further into 1H27. Second source initial share appears
   limited to 10%, with VR ramp expected later in 2027. TE still unlikely to participate supplying Nvidia backplanes.
4. Rubin Ultra rack design in flux, with Oberon 72×2 cancelled. Nvidia leaning towards single Oberon design with 72 GPUs and higher
   NVSwitch attach rate; preliminary estimates suggest at least 10-20% increase in backplane content per rack/chip.
5. Nvidia NVL72 connector demand tracking towards higher end of original 60-80k rack forecast driven by Blackwell upside.

Top 3 Channel Comments:

• Nvidia appears to have identified a potential solution for Kyber’s midplane PCB. Initial testing of a Teflon/M10 material shows good
  signal integrity performance in early testing, though material supply chain readiness continues to be the gating factor. For that
  reason, the Kyber timeline remains for Feynman.
• The rack design for Vera Rubin Ultra is still TBD. Nvidia appears to be leaning towards a single Oberon rack design with 72 GPUs but
  a higher number of NVswitches, with 13 switch trays or a total of 52 NVswitches vs 9 trays and 36 NVSwitch ASICs in VR200. The
  increase is driven by the increase in I/O density per chip due to the shift from four to two dies per VR Ultra package.
• Very few connector suppliers appear to be adding meaningful capacity outside of AI/Datacenter. We are getting concerned that
  over the next 6–12 months, customers and distis are likely to be chasing product. Amphenol and TE appear to be prioritizing DC/AI
  and select Industrial customers/programs, sometimes at the expense of other markets/customers in the channel.

Other Key Takeaways:

1. Initial CPC ramp projected in 1Q27 for a hyperscale 1.6T switch program with Amphenol noted as lead supplier.
2. CPU interconnect socket demand improving to ~30% Y/Y; TE seen outperforming in 2H on share gains.
3. Initial HVDC power connector/cable orders beginning to flow; Amphenol seen as designed in on Google’s HVDC platform.
4. Interconnect supply incrementally tighter, with lead times extending by several weeks; availability downticking in distribution.
   Passives incrementally tighter, capacitor tightness extending into higher capacitance ceramics, pockets in resistors, magnetics and
   other components, while electromechanical availability better/but inflationary on rising input costs.
   TE/Amphenol/others passing double-digit channel price increases; direct pricing more moderate & mainly in Industrial.
   Auto demand remaining resilient, with select inventory replenishment driving modest upside in 2Q shipments and 3Q orders.
   Commercial transportation demand improving, led by EV penetration in China, Europe recovery and uptick in N.A.
   Industrial reads continue strengthening, with double digit 2Q growth Q/Q globally led by energy, power and automation markets.
   

Conclusions:

1. IP&E fundamentals continued to strengthen through 2Q, with shipments, bookings, and B2B ratios all finishing the quarter above
   expectations. While AI/Datacenter remains the primary growth driver, improving conditions across Industrial, sustained strength in
   Aerospace & Defense, and a more resilient Automotive market provide increasing confidence that the recovery is becoming broader
   and more durable. Combined with tightening supply and ongoing pricing tailwinds, we continue to believe the industry is in the early
2. stages of an upcycle capable of supporting double-digit growth into 2027.

Full report available from: Dennis Reed, Sr. Research Analyst, Edgewater Research