Hello, and welcome to the Second Quarter Earnings Conference Call for Amphenol Corporation. Following today’s presentation, there will be a formal question-and-answer session. Until then, all lines will remain in a listen-only mode. At the request of the company, today’s conference is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to introduce today’s conference host, Mr. Craig Lampo. Sir, you may begin.

Thank you very much. Good afternoon, everyone. This is Craig Lampo, Amphenol's CFO, and I'm here together with Adam Norwitt, our CEO. We would like to welcome you to our second quarter 2020 conference call. As a reminder, during the call, we may refer to certain non-GAAP financial measures and may make certain forward-looking statements. So please refer to the relevant disclosures in our press release for further information. The company closed the second quarter with sales of $1.987 billion and with GAAP and adjusted diluted EPS of $0.85 and $0.81, respectively. Sales were down 1% in U.S. dollars and were flat in local currencies, compared to the second quarter of 2019. From an organic standpoint, excluding both acquisitions and currency impacts, sales in the second quarter decreased 3%. Sequentially, sales were up 7% in U.S. dollars in local currencies inorganically. Breaking down sales into our two segments. The interconnect business, which comprised 96% of our sales, was down 1% in U.S. dollars and was flat in local currencies compared to last year. Our cable business, which comprised 4% of our sales, was down 1% in U.S. dollars and up 3% in local currencies compared to the second quarter of last year. Adam will comment further on trends by market in a few minutes. Operating income was $357 million in the second quarter of 2020 and operating margins were 18%, which was down 230 basis points, compared to the second quarter of 2019. Similar to last quarter, the year-over-year reduction in operating margin reflected a higher negative conversion rate than our typical 30% downside conversion, due to the continued negative impact of the COVID-19 pandemic on production and productivity, particularly due to various government restrictions that have limited our ability to adjust costs in certain geographies. Compared to the first…

Well, thank you very much, Craig, and allow me to extend my welcome to everybody here on the phone today. And first, I just want to also offer my hope and wishes that for all of you on the call here, that you, your family, your friends, as well as your colleagues have remained safe and healthy over the course of the last quarter. As Craig mentioned, I'm going to highlight some of our achievements in the second quarter. I'm also going to discuss the trends and progress across our sales markets. And then finally, I'll make some comments on our outlook for the third quarter. With respect to the second quarter, as Craig just detailed, our sales reached $1.987 billion, which was a reduction from prior year prior year of just 1% in U.S. dollars, it was actually flat in local currencies and down just 3% organically. And this was driven by reductions in the automotive, commercial air, mobile networks and military markets, which were essentially offset by growth that we saw in the IT datacom, mobile devices and industrial markets. The declines that we saw in the quarter were largely related to the weakness in demand, disruptions and government mandated factory shutdowns that resulted all from the COVID-19 pandemic. We're, in particular, very pleased to have realized 7% sequential growth from the first quarter, which is substantially higher than our original expectations. The company booked $1.971 billion in orders, representing a book-to-bill of just under one to one. And very importantly, despite the significant disruptions to our operations in the quarter related to the pandemic, operating margins reached 18%, a very strong performance given this environment. As Craig just mentioned, Amphenol's financial position remains extremely strong, and that is reflected very well in our operating cash flow of…

Absolutely [Operator Instructions] Our first question is from Amit Daryanani from Evercore. Your line is open.

Thanks for taking my question. I have a question and a follow-up. First one here, if I think about the implied operating margins you guys are guiding for September quarter it's around 19%, slightly less than that I think, on about 2 billion of sales. I would love to understand because if I go back to the first half of ‘19 when revenues are in this $1.95 billion to $2 billion range, you guys are doing well over 20% operating margins. What's this 100 basis points delta attributed to? Is this just a cost to COVID as we go forward and more structural, or do you think it's transient as you go forward?

Sure. Thanks, Amit. Yes. First, I think we're really happy with the operating margins. We certainly had in 2006 second quarter reaching 18% with the significant cost that we had due to the COVID-19 pandemic, the government mandates and the restrictions that impacted certainly our production and productivity. As we look into the third quarter, we still expect to have some of those costs impacting us. I mean, certainly, to a lesser extent, we had some improvements. We saw some improvements as we came through the second quarter. But we still have some of those headwinds as we're moving into the third quarter, just to a lesser degree. But -- and you can see that by the sequentially from second quarter to the third quarter improvement that we're, kind of, implying. I think your math is not so far off in terms of our implied margins as we look into the third quarter. If you look to your question, in terms of the impact from the first quarter of 2019 or even if you look at the fourth quarter of 2019, there's a couple of things that are impacting our margins in the third quarter. One would be certainly the COVID costs that we're still going to be incurring in the third quarter, albeit to a lesser degree. And then the other thing, if you're comparing to earlier in 2019, we still do have a little bit of headwind on margin related to certainly some of the acquisitions we did, we did nine acquisitions in 2019, all of which were -- or many of which were below our average margin. And that we're still continuing the journey to bringing up to the company average. As you can imagine, as we're going through a pandemic and all the things that they have to deal with to ensure that their businesses are maximizing their profitability, and given the -- in many cases, the revenue reductions, some of these actions aren't necessarily easy to implement in the current time. But we certainly have full expectations in the longer term that we still should be able to get them back up to the company average. So that really would be the bridge if you, kind of, were comparing earlier 2019 quarters to essentially the third quarter of 2020. But I have to say still, I'm extremely proud of the team, achieving 80% in the second quarter and then taking the actions that are needed to really sequentially get up to these higher levels that we do expect in the third quarter. We're really happy with those results.

Thank you speakers. And just a reminder for the parties that queued up for the Q&A to limit asking to only one question. Thank you. We'll proceed to Mark Delaney from Goldman Sachs. Your line is open.

Yes, good afternoon. Thanks very much for taking the question, and congratulations on the good results. I was hoping to better understand what the company has seen in the mobile devices end markets, and to what extent are there opportunities for the company to participate in more sophisticated designs, especially around 5G in the second half of this year in some of the past years when the company's had good participation on new program launches. You've seen a pretty big sequential increase in the third quarter. I realize there's a base effect of where you're coming in off of the 2Q levels. But trying to understand to what extent you're able to participate in some of those opportunities in 3Q? Is there anything around just timing and maybe it's more 4Q this year, or what's the opportunity set that's maybe playing into the guidance there? Thank you.

Well, thanks very much, Mark. Look, I talked already in my prepared remarks about the fact that in the second quarter, there was some degree of catch-up from the first quarter. And I just want to credit our team for what a fabulous job they did in recovering from the shutdown. As you know, well, our mobile devices business, virtually all of that is manufactured in China. And so when that was really having that comprehensive shutdown in the first quarter, that had a disproportionate impact on our mobile devices team and also on the manufacturing of our customers, in fact, at the same time. So, our team did a fabulous job of recovering, getting all the workforce back in place by really the beginning of March and then was able to really catch up with that demand here in the second quarter. And normally, we would not see a 47% increase in the second quarter. In fact, the second quarter -- sequentially. The second quarter tends to be a little bit more of a lull in the mobile device market, as you know, having followed the company for quite some time. So, I think if you take that out, that sort of anomaly here in the first half, we still have in the second half, great participation in many new programs. And whether those are 5G-related or otherwise, just the devices continue to get more complex; our team devices continue to do a great job in helping to enable those devices from a wide array of customers and ultimately puts us in a very strong position. I would say with the pandemic that there does appear to be a little bit of slippage in some programs that maybe would have normally launched a little bit earlier that may be…

Thank you. Our next question comes from Craig Hettenbach from Morgan Stanley. Your line is open.

Yes, thank you. Adam, I guess good to see kind of a thaw in the M&A environment after the first half of the year. So, just curious to get your take on that small tuck-in and just how you see things set up in terms of opportunity set and ability to execute on M&A as those opportunities arise?

Yes. Well, thanks so much, Craig. I mean, we're really excited. It's not a big company on and on, but it's a great company. And I think it is a wonderful reflection of our approach to acquisitions. We have taken for a long, long time that very patient approach of incubating relationships with a wide array of companies around the industry and around the world, developing relationships, developing real mutual trust between us and the owners of these entrepreneurial companies, such that when it is appropriate and when they have -- they have sort of crossed the kind of canyon, if you will, of deciding that they want to sell their company, we don't have to build that trust from scratch. We've already established those wonderful relationships. Because the fact is in a pandemic, when we're all socially distancing, creating new relationships from scratch is harder, its much harder to do. And so this was not in the case of Onanon. A book that showed up from a banker, and we said, well, who are these people? Well, you can't meet them. None of that happened. We had long-standing interactions with the entrepreneurs who founded this company and who, by the way, stay on as now the general manager of that company going forward. And so we're very excited about that. The second thing is this is a company that has just a really unique technology proposition, unique products that go into exciting areas of the industrial market, in particular, into medical technology. And we – I talked earlier about the strength of our medical business in the quarter, it's not that we saw that strength and thereby said, oh, let's go buy Onanon because it's a medical company, that’s more coincidental. But I think the fact is is they are a company that is present in next-generation electronics, used in a wide array of applications that are exciting and that are important. And we are very proud to bring them into the Amphenol family. The overall M&A environment in a pandemic, it's different. As you can imagine, you're going to be more careful. You're going to make sure you know the people. You're going to make sure that the business has resilience to it in a time like this. But all that being said, we continue to have a strong pipeline and, you know, Craig, Craig mentioned before, we acquired nine companies last year, I don't know that we're going to do that this year with the pandemic so far in the first half but we're very pleased that we were able to make this one and bring them into the Amphenol family, and we're very hopeful that there will be more to come in the future.

Thank you. Our next question comes from Matt Sheerin from Stifel. Your line is open.

Yes, thank you. Good afternoon. Question, Adam, regarding the industrial sector. You had very strong results there. You talked about some of the end markets, particularly medical. Did you see any signs of maybe some pull-in inventory building at customers. We're hearing that from some semiconductor company and other component companies. So I'm wondering, if you're seeing any of that. And then within the medical markets, are you beginning yet to see a shift from COVID-related demand and products versus elective surgeries? Thanks.

Thanks so much, Matt. Great question. Look, I don't know that I would all the demand a pull-in. But I would call the demand that we saw for COVID related medical equipment, in particular, things like ventilator, respiratory therapy devices, patient monitoring for new hospital construction, things like that, that was very, very significant demand. There's no doubt about it. Is that a pull in? I mean, it didn't exist before, this demand. So it was all new demand, the world never built as many ventilators as the world is now building. And I don't know that pull in would be necessarily the right term for that, but there was definitely a rush to build. And from our perspective, what our team just did such a great job of is massively increasing their capacity to support that demand when oftentimes, our competitors could not do so. And I can't tell you the number of calls I've had with customers, letters of gratitude from customers, dozens, if not hundreds of programs in support of COVID, where our team just pulled out all the stops and made it happen. And we worked with companies who never built medical equipment before. We've worked with long-term medical companies. We've worked directly with governments around the world, who are building strategically their medical infrastructure. And these are all things that were not just, sort of, a one-time situation, but rather is an ongoing recognition that the world just didn't have enough of a certain type of medical equipment to deal with the respiratory borne pathogen. And I'm guessing that, that is not a situation that people around the world want to face again. Now, are we seeing a shift from more COVID-focused medical equipment to the more elective surgical? I mean, there's no question that early in the quarter, we did see a little bit softer demand for products that are used in purely elective fashion. I wouldn't say that, that was material. And obviously, despite that, our medical business within industrial did really, really well. I mean this is outstanding performance. Is that balancing a little bit more here coming into the third quarter? Yeah, I guess that would probably be a fair way to put it. I mean, we expect, as I said earlier, in the third quarter, we expect our sales to be at or a little bit below the levels that they were in the second quarter. These are very, very high levels of consumption. And our team continues to work hard to make sure that we can satisfy that demand. And if there's a little bit of a more broad demand for some of those things that were earlier push back, that may be the case. But look, we're just really proud of what the team has done here in medical.

Thank you. Our next question comes from Samik Chatterjee from JPMorgan. Your line is open.

Hi. Thanks for taking my question. I just wanted to see, given the order number that you had, which looks like for the first time in a while is below the $2 billion number. If you can give us a bit more kind of visibility into what the cadence was through the quarter, particularly kind of exiting the quarter? What was the cadence like? And curious if you're seeing any big differences in terms of order activity between regions given that the different regions seem to be in different places relative to containment of COVID? Thank you.

Yeah. Thanks so much, Samik. Look, I think that we came into the quarter, as you will recall, on the heels of very, very significant orders that we had in Q1. We had the highest book-to-bill in the history of the company and the third highest orders, absolute order volume in the history of the company. I think it was $2.150 billion. And so it's not surprising to me. It was not surprising to us that our orders would more level at or around our sales levels here in the second quarter. In fact, I would have told you that, after such a big order number, it wouldn't have surprised me if the orders were actually a little bit lower than the sales levels. And that was probably our expectation coming into the quarter that orders would have been a little bit lower. So I'd say that the fact that we outperformed on sales and met – nearly met those sales levels with orders, is a good reflection of the demand from our customers. In terms of the cadence throughout the quarter, I wouldn't say that there's anything so notable. The middle of the quarter is probably a little lighter than the beginning and the end of the quarter. That's maybe the only thing I would say. And regional, I don't think there was anything abnormal or anomalous from a regional perspective relative to orders.

Thank you. Our next question comes from Wamsi Mohan from Bank of America. Your line is open.

Yes. Thank you. Your Q3 guide is clearly about consensus and quite strong. But when you adjust for the $5 million in M&A and the incremental FX benefit, the guide is also somewhat subseasonal. Can you talk about what sort of dynamics are causing that? Did you see -- I know you addressed this on industrial, but more broadly, did you see any pull forward, if so, in any of the end markets and how large that might have been?

Yes. Thanks so much, Wamsi. Well, I'll point to a couple of markets to describe this and maybe with a little bit more specificity. I talked already about mobile devices. Where I would say that, the demand that we saw in the second quarter did reflect some catch-up from the disruption that we experienced in China in the first quarter, so that maybe one piece of the puzzle. I think the second is, I would talk about IT datacom and I mentioned that we expect IT datacom, expect that market to be down in the kind of mid-teens quarter-to-quarter, and that is just a reflection of the extraordinary level of demand that we had here in the second quarter. I mean these are still very, very high levels of IT datacom demand in the third quarter. Traditionally, you would see IT datacom strengthening into the second half. And the fact that there was this very significant and I would say, incremental demand, not pull ahead per se. Again, this is that nuance of a pull-in, the bandwidth requirements that emerged in the second quarter and even late in the first quarter was not customers around the world saying, 'Oh, we had originally planned to put this bandwidth in, in the second half, let's put it in the first half. This is a new demand for bandwidth because all of us are on video calls all the time because all of us are working from home, schools are teaching remotely and governments are working remotely. Hospitals are communicating remotely. I mean just an intense demand for bandwidth that nobody knew was going to exist as of January 22, which was the day before Wuhan was locked down for the pandemic. And so that's -- I wouldn't call that a pull-in, I…

Thank you. Our next question comes from Nikolay Todorov from Longbow. Your line is open.

Hi, guys. Thanks for taking the question. Just to -- can you guys speak a little bit about your assessment of customer inventories? And I know we're going back to just questions of pull forward and not so. But I'm particularly interested in the IT datacom, mobile devices and industrial end markets. If I look at the mobile devices and combined kind of the guide through the third quarter, essentially implies that your sales are going to be a roughly flattish where production is down about 15%. And I understand part of this is content growth. But similarly, on the industrial side, if we assume that some of that medical demand is going to subside or at least flatten into the second half. What are you seeing in your nonmedical industrial customers in terms of inventory situation at their docs?

Yeah. Well, thanks so much, Nikolay. I mean, as I've said before, we don't have perfect visibility into our customers' warehouses and to how much inventory they have. We get a little bit of visibility from our distributors, but distributors represent just a bit over 15% of our sales. And I would tell you, vis-à-vis our distributors, the inventory levels are very healthy. There's nothing abnormal about them. I wouldn't say that they ticked up or ticked down in any meaningful way here in the second quarter. I mean as it relates to IT datacom, again, I don't know the numbers, but I can tell you, I would be pretty surprised if our customers in IT datacom put anything that we ship to them on the shelf of a warehouse. I mean, this was a dramatic need for product to be put in the field so that people like you and I would not see a spinning circle when we turn to Netflix on in the evening. And if it's sitting in -- if our product is sitting in a warehouse, it's not helping someone get bandwidth. And so I would be very surprised if any of that stuff ended up building inventory. Mobile devices is really -- there's very little inventory in the whole channel. So I don't think that that's one that I would note. And relative to industrial, I think industrial is the one market for us, especially when you take out medical, where we have a little bit of a higher proportion of distribution. And so there, I guess, I could be have a little bit more visibility than normal, and I would tell you that the inventory levels seemed healthy and reasonable and no abnormal changes as we came into, or out of the quarter, at least relative to the distribution side of our industrial business.

Thank you. Our next question comes from Deepa Raghavan from Wells Fargo Securities. Your line is open.

Hi, good afternoon, everyone.

Hello, Deepa.

Hey. Are you able to speak specifically to Chinese -- to China's trends versus overall? And my question is more geared towards gauging how much of the forward momentum in China is predicated on U.S. and Europe recovery supporting that? And I guess the second part of the question is, are there any verticals -- are there some verticals that are more at-risk if these developed nations remain pressured? I mean just -- it doesn't feel like China is enough there to decouple from Europe or U.S.? Thank you.

Thank you very much, Deepa. Well, look, it should not surprise anybody that after the first quarter where because of the pandemic, our China operations were shutdown for three weeks and then ramping up over the course of the following month that there was significant sequential increase in our sales in Asia and in general and specifically in China. I mean, that is normal. And mobile devices is the best example of that, which is essentially all fulfilled in China, and that grew 47% sequentially. You talked about, is that momentum tied to the U.S. and Europe, or just broadly around the world, all -- most of the mobile devices in the world are made in China, the vast majority. And so to the extent that people in U.S. or Europe buy more or less phones, that's going to impact demand there. So I guess in that market, I would say that's the case. The IT datacom market is another one where there is more -- there's a certain degree of production in China that shift around the world. And so again, I think that would be one where it's not just a Chinese domestic market. Now, I know you've alluded to kind of decoupling and -- which is a little bit of a different topic than just the kind of recovery in the second quarter. And I'll just say one thing about that. We read the papers like everybody. We're very close to all of the geopolitics of the moment. And I've said before and I will just say it again here today. The way that we organize our company has always been. We are a global company, but we rely on local management around the world to execute. That is we give authority to our more than 120…

Thank you. Our next question comes from Steven Fox from Fox Advisors. Your line is open.

Thanks. Good afternoon.

Hi Steve.

Hi. I was just wondering, you touched on some of the dynamics going on with IT datacom. I was wondering if you could do the same thing for the outdoor markets with wireless infrastructure and broadband. How would you sort of compare and contrast the need for bandwidth there and your content gains going forward for the rest of the year? Thank you.

Thanks so much, Steve. Look I would say that if you compare broadband and mobile networks in kind of the acute situation of the last, let's call it, four months, five, four and a half or so months where everybody has been working from home, I think the pressure has been more on the core Internet, the pressure has been more on the broadband service providers than it has been necessarily on the mobile service providers. And I say that because the fact is the real bandwidth constraints have come from people at home, where the vast majority of the people still today at home are not using wireless broadband as a means to deliver high-speed Internet to their house. Now that can change. And I think maybe this whole situation is going to be a catalyst for that long-term to change, because I can tell you, myself, and I won't name my cable operator. They are all wonderful but it was not always easy over the last four months. When I had two or three kids in the house, all on Zoom calls, when I was on Zoom Call, my wife was on Zoom Call, I mean – or Teams or Google or whatever, I mean, we're all on video calls and that was not always perfect. And then my son decides to play a video game and all of a sudden, the whole thing just freezes up. And so the fact is there is a real rush to help that at-home capacity over the last quarter. And I think that was reflected more in what we saw with broadband growing 12% quarter-to-quarter as opposed to mobile networks. Because in mobile networks, what we saw was really a growth from our OEM customers, and we grew 9% sequentially, which…

Thank you. Our next question comes from William Stein from SunTrust. Your line is open.

Hi, good afternoon. Thanks for taking my question. I'm wondering if you can elaborate, Adam, on capacity. I think you mentioned that this was still somewhat of a constraint in the quarter. Did I miss here? I thought that as of the end of last quarter, that these issues have been resolved at least internally, maybe it's more a matter of your customers' capacity. Any sort of clarification would be great? Thank you.

Well, thanks, Will. No, I mean, I would tell you that as we came out of last quarter, I mean, you'll recall, the first quarter was really a story of China and the very significant kind of one-off of the factories there. It was without equal. There was no essential business. There was nothing. It was just – they were shut down for three weeks. And then you had to reopen through a very complex and cumbersome process, actually, to prove that you were protecting your people, and we did just a great job of that, and thereby, we're able to open maybe a little bit faster than some others. But as the virus spread around the world to the nearly 40 countries in which we operate, there was a whole range of restrictions that ultimately did impact our capacity, our productivity in a whole variety of countries and not just the nearly 40 countries, but even here in the U.S., we operate in dozens of states in the U.S. and every state had a slightly different approach. I remember very well the day that the very first restrictions were taken, and that was not even a state level restriction. It was a county. Where Contra Costa, and I think it was Alameda counties in California adopted the very first real significant business restrictions to enable better social distancing and to stop the spread of the virus. And so, our teams around the world in our more than 200 facilities, it's hard to find one where we didn’t, at one point, face something during the quarter where the team had to somehow navigate a government restriction or actually just us taking measures to protect the people that were important and appropriate measures to protect our people. And so, no doubt…

Thank you. Our next question comes from Joseph Spak from RBC Capital Markets. Your line is open.

Thank you. Good afternoon everyone.

Good afternoon.

I wanted to maybe just zoom out a little bit for a second because over the past couple of months, we've seen the market really dive-in and pay a lot of attention, increasing attention, I'd say to alternative powertrains for transportation, be it for the lighter commercial vehicle markets, but also things like hydrogen for industrial uses, particularly with the news out of Europe. So these are clearly long-term trends, but maybe sometimes market enthusiasm can get out over its skis on the opportunity. So can you speak to what you're seeing from your customer on these sort of things and whether something like hydrogen is even an opportunity for Amphenol?

Well look, these are all exciting things. And I remember years ago, when we were working on the first electric cars that we worked on as it -- I wonder if there's ever going to be an electric car that people will actually own and drive. And now I look out in our parking lot here because I have a beautiful view of our parking lot out of my office window, and I see a few of these electric cars, more than I ever did before. So you talked about something like hydrogen or fuel cells, you talked about alternative energy sources of whatever for cars. I think long term, there will be new drivetrains. I think there will be new technologies. And I think regardless of what it is, the great thing about these revolutionary new technologies is that they always require a new type of interconnect. They require a more ruggedized, they require a higher technology solutions. And so they create opportunities for our company. They create opportunities for our whole industry. And I think that's a really good thing. Now I thought you're going to ask Joe, that given the pandemic and social distancing, is that going to have an impact on these things? I think there's a chance. Look, I'm not the one to tell you which way the auto market is going to go and which way drivetrains are going to go. But these last 6 months here, and it is really 6 months ago from tomorrow that Wuhan was shutdown. These have been really unbelievable, an unbelievable time period of change. It's causing people to reassess everything. I compare it at home to it like someone throws a bag of flower in the air and you just don't know where the flower is going…

Thank you. Our next question comes from Shawn Harrison from Loop Capital. Your line is open.

Hi everybody. Adam, I wanted to dig in just on your comments on the wireless networks business. And you said, it would weaken both at the OEM as well as the service provider level in the back half. How much of the weakness is just a tough sequential comparison versus maybe some pauses you're seeing in deployments? And if you are seeing any pauses, is that just through the end of the calendar year and then 2021 looks better for that business? Any kind of commentary would be appreciated?

Yeah. I mean, look, I guess there's a little bit of each, Shawn. I would say that if you're a big company who is dealing with massive increases, a bandwidth demand, and you're facing constrained capital. You may be allocating some of that capital towards that bandwidth as opposed to expansion of a next-generation mobile network. And I think there's a little bit of that on the margin. There's been a lot of corporate goings and comings. I think a lot of those things have been settled now. But I think it's a little bit of each as we come here into the third quarter. Look, I think long-term, our outlook for this market remains to be a very positive one. We have a strong position, both with OEMs and operators. And in particular, a strong position, on next-generation systems. We've had that difficult comparison for a couple of quarters now because of the restrictions that were put in place in China, and that will continue here for really through this year. But by and large, I would tell you that we still have a very positive outlook for the market long-term. And there's a couple of dynamics that you described are probably a pretty good way to capture what's happening here in the third quarter.

Thank you. Next question comes from Jim Suva from Citigroup Investment Research. Your line is open.

Thank you. Adam, in the past, sometimes there have been times where, like in mobility, there have been like integration of connectors and integration of antennas and integration of sockets. And then there's times when there's cyclically like expansion of those sockets, whether it be technologies like 4G or 3G or integration of, say, Wi-Fi and all these different things. As you look forward, say, in the mobility segment, at times where you've mentioned there's been some integration that has kind of been pressured. I wonder with 5G, can you give us any color about -- does that give you a chance for like more socket wins and more content per item versus in the past or how can we think about that? Thank you.

Thanks so much, Jim. Well, look, 5G, and I think I've talked about this in the past, the good news about 5G is 5G is not a replacement to prior modes of devices communicating with networks; it's a supplement because you cannot just have a device which only communicates using 5G. It would be useless outside of just a couple of areas. And you have this kind of chicken and egg that you can't -- the network is not useful without the devices, but the devices are also not useful without the network. And thus, the devices have to be backwards compatible all the way through all the generations. You drive from Manhattan to San Francisco and in between there, you're going to go through a lot of areas that may not even have 4G, LTE, may not even have 3G. And maybe it will still be 2G kind of a communication and so -- but your phone still have to work. You still have to be able to call 911 and you still have to be able to look on Google Maps and these kind of things. And so the fact is, is adding a 5G functionality increases the complexity of the device. Now, that's a generality. Obviously, each device itself, each customer, each program is going to have a different architecture, a different approach to designing that. And whether that's going to cause more connectors or cable assemblies, or less, more antennas or less, more mechanisms or less, you cannot draw just a very perfect generalization about that. You can say that in its totality, you would expect 5G to add to the complexity and would expect that that would create further opportunities. But you can't assure yourself that on each program, that's going to be the case. So, I think 5G net-net is a great positive, and it's a great positive for us, not just in the devices, but it's also a positive because we work in the networks. And it's also a positive because we work in the core -- at the core Internet where we have such a strong position as well. And so we think 5G has the potential to impact virtually all of the segments of our business. You talk about Internet in factories, and you talk about adopting high-speed data into new medical devices, you talk about how it works even in the military, what the military is going to do when you have 5G functionality, all of these things are creating new applications, new functionalities, which ultimately are going to need new interconnect solutions that Amphenol can provide. So the long-term prospects, I think, from 5G are very pervasive and very positive. Ultimately, is a given phone or a given tablet going to have more or less of the things that we sell? It's impossible to say in the short-term.

Thank you. Our next question comes from David Kelley from Jefferies. Your line is open.

Hey good afternoon. A question on automotive. And Adam, you talked about visibility to substantial sales improvement in Q3, do you foresee any supply chain risk to meeting that ramp? And then realizing there's unlikely to impact the near-term, but given the magnitude and timing of this rebound, is this an opportunity for Amphenol to take market share from competitors that might still be feeling, let's call it, deeper effects from the Q2 disruption? Thank you.

Thanks so much, David. Look, I think from our perspective, I don't see a risk to our team ramping up. Our team is just so nimble. They're flexing their capabilities. We saw that even during the course of the second quarter, if you think about the trajectory of the auto market, just within the second quarter. I can tell you, April was not the most fun month to be an automotive interconnect supplier. That's for sure. But by the time we came into June, we were already starting to see some recovery of momentum, and our team is able to flip a switch and really be running to satisfy that demand. Now your question about market share, I will tell you, and I'm going to broaden this to be beyond automotive. This is an existential crisis for many. I talked during my prepared remarks and we've talked so many times about the strength of the diversity of Amphenol. And you couple that with the financial fortitude that Craig has just done such an amazing job of ensuring inside this company and that has created ultimately a resilience to Amphenol that is, I believe, second to none. There are many in our industry and in other industries, but in our industry, who are more focused. And those focused companies, to the extent that they're on the wrong side of the market volatility that can create a more existential threat, and it can create in the eyes of customers, a perception of an existential threat. And that ultimately may, over time, create a kind of a draw to those customers to work with a company that demonstrates resilience in the time of true crisis. And I think in that respect, Amphenol comes out really passing that test with flying colors. And so I wouldn't just confine that to automotive, I would say, across all of our markets, our customers have seen in Amphenol, a company that can deal with the crisis like no other, and they want to have that. There's been so much talked about supply chain resiliency and as opposed to sort of efficiency versus longevity kind of that debate that people have had. And I think we've always strived to give our customers both, tried to give them a great offering of the best products at competitive prices, but also from a company that's going to be around regardless of what crisis hits us. And I think that can be a positive long-term and in particular, in a crisis that was – where the catalyst for that crisis is a public health emergency. It almost brings more focus to that dynamic than ever before. And so I think long term, that can create an opportunity for our company across all the markets, including automotive.

Thank you. And our last question for today comes from Joe Giordano from Cowen. Your line is open.

Hey, guys. Just wanted to dig in on the industrial. We've touched on it a little bit, but can you maybe put a finer point on what the non-medical piece did or what that would have looked like without the benefit from medical or maybe on a size the scale, the size of medical for us in some fashion?

Yes. Thanks so much, Joe. I mean, look, we don't break out every detail of all of our industrial market. It would be – it would make this phone call to go for hours. But I will tell you that we had strong performance in a number of our important industrial segments beyond medical. I mentioned, specifically instrumentation, heavy equipment. We had great performance also in our sort of battery related applications for heavy vehicles. And conversely, we had other parts of the industrial market that were more impacted, things like oil and gas, as I referred to before. But medical was not the only story in industrial. And I think we would have still had a good performance in industrial, even without that medical, especially if you think about on a sequential basis, growing 17% sequentially in that market. I mean, that that could not have come from just one piece of that industrial puzzle, which was medical. So I think we still have strong positions across industrial. And what has really been the basis of our industrial market is the diversification within that very, very broad market, and what ties industrial all together, remains, these are just harsh environment applications, where you're taking high technology interconnect and sensor products, antenna products, and you're putting them into very inhospitable environments. Everything from down in oil wells, to a very clean ICU in a hospital and everything in between, and we have great performance in many segments of that market. And the diversity within that market I think helps us to have that strong performance.

Thank you, speakers. As at this time we don't have any further questions on queue, I'll hand the call over to you for closing remarks.

Well, thank you very much and thanks to everybody for your attention to Amphenol today and just like to take this opportunity to wish you all a good summer. I hope you get some well deserved vacation time this summer. You'll need it to come back fully recharged for the second half and Craig and I look forward to speaking to you all 90 days from now. Thanks again.

Thank you.

Thank you for attending today's conference and have a nice day.