Compare moats
Up to three covered companies, band by band. Every call is a curated editorial judgment, never a disclosed figure — and every band carries its cited basis.
| TE Connectivity | ASM International | NetApp | |
|---|---|---|---|
| Moat rating | narrow The FY2025 10-K's own Competition section undercuts any claim of insulation: 'The industries in which we operate are highly competitive, and we compete with thousands of companies that range from large multinational corporations to local manufacturers', competition is 'generally based on breadth of product offering, product innovation, price, quality, delivery, and service', and TE has 'experienced, and expect[s] to continue to experience, downward pressure on prices'. The same filing explicitly disclaims IP as the basis of its position: 'we do not believe that our competitive position or our operations are dependent upon or would be materially impacted by any single patent or group of related patents.' What TE does hold is durable rather than absolute — it calls itself 'one of the leading providers of advanced automobile connectivity solutions', its Industrial segment 'a leading supplier', and it converted that position into rising profitability across the same filing's three income statements (gross margin 31.5% of net sales in FY2023, 34.4% in FY2024, 35.2% in FY2025). A position that earns expanding margins into admitted price pressure is an advantage; one held against thousands of competitors and no decisive patent is not a wide one. | narrow The 2025 annual report (published 2026-03-12) says 'ASM is the leader in the fast-growing single-wafer ALD market – with a market share of 55%+ (ASM estimate, Investor Day 2025)'. It says ASM 'maintained leadership with our market share surpassing 55%' as the industry moved from FinFET to GAA. And it says that 'Based on the breadth of our R&D engagements and critical production-tool-of-record (PTOR) selections already secured in 2025, we expect to at least maintain our market share' into the 1.4nm node. The Q2 2026 results (https://www.asm.com/media/y0mkxj21/20260728-asm-reports-second-quarter-2026-results.pdf) say the 1.4nm node is on track for its first meaningful contribution in the second half of 2026, 'reflecting increased market share gains in both ALD and Epi'. 2025 gross margin was 51.8%. That is a strong, profitable position, but every share figure behind it is ASM's own estimate or expectation, and no independent share source supports it, so the rating is narrow rather than wide. The exposures also weigh: the five largest customers took about 53.6% of 2025 revenue and China more than 30%, and the report describes the main competitors as 'much larger companies from the United States and Asia'. | narrow The FY2026 10-K shows a real, durable lock but not an unassailable one. On the durable side: "Our cloud storage services are based on the same ONTAP data management software that underpins our on-premises ONTAP storage infrastructure offerings", and the same filing's income statement shows the company holding a gross margin near 71% across all three reported years - $4,433M on $6,268M in FY2024, $4,613M on $6,572M in FY2025 and $4,899M on $6,925M in FY2026 - while revenue grew from $6,268M to $6,925M and income from operations widened from 19% to 24% of net revenues. Holding that margin through the memory-cost shock the same filing discloses is the commercial evidence the lock is worth something. On the limiting side, the filing says competition "is intense", that in public cloud "customers may choose native cloud services that are consumed as operating expenses", and that "New competitors or alliances among existing competitors could emerge and quickly gain significant market share" - and IDC's 1Q26 external-storage tracker (Blocks & Files, 2026-06-16, cited on the AFF/ASA product row below) ranks NetApp second behind Dell, not first. |
| Moat type | switching costs The FY2025 10-K locates the advantage at the customer, not in patents. It describes 'close working relationships with many of our customers' whose 'relationships with them typically date back many years', and co-development as the mechanism: 'By working with our customers in developing new products and technologies, we believe we can identify and act on trends and leverage knowledge about next-generation technology across our products.' Roughly 75% of fiscal 2025 net sales were direct to manufacturers rather than through distribution, and the Transportation segment's products 'must withstand harsh conditions' — parts engineered in with the customer and built to survive the application, so the position sits inside the customer's design rather than in a purchase order. The filing rules the alternative out in its own words on intellectual property, so intangibles_ip is not the source; the 'thousands of companies' in Competition rules out efficient_scale. | intangibles ip The report grounds the ALD lead in accumulated process know-how and patents rather than unit cost: 'ASM has the broadest portfolio of ALD products with innovative ALD reactor designs. Our strength in chemistries and applications using new materials means our customers can meet advanced node technology challenges.' It also cites a LexisNexis PatentSight study finding that 'ASM holds a strong and impactful patent portfolio on its core strength of ALD as measured by both Competitive Impact and Patent Asset Index'. Switching friction reinforces this. Tools enter fabs through PTOR selection, the report notes that 'Failing a customer during a production ramp could create significant problems for them', and installed systems are supported 'with a view to having them in production 24/7 for 20+ years'. But ASM wins those PTOR slots node by node on process capability, which makes IP the primary source. | switching costs The FY2026 10-K makes the source of the advantage explicit and it is the cost of leaving the data-management layer, not a network or a patent estate. The same ONTAP software runs the on-premises arrays and the cloud services ("Our cloud storage services are based on the same ONTAP data management software that underpins our on-premises ONTAP storage infrastructure offerings"), and the AFF family "allows customers to connect to clouds for more data services, data tiering, caching, and disaster recovery". A customer's volume layout, snapshot and replication workflow and operating tools therefore carry from the array into Azure, AWS and Google rather than being abandoned at the cloud boundary — the filing describes NetApp as "the only provider of enterprise-grade storage services natively embedded in the world's largest public cloud providers", so the usual moment of escape is instead the moment the relationship renews. |
| Leadership | co leader The FY2025 10-K claims leadership in qualified form and then names the peers who contest it. Transportation Solutions 'is a leader in connectivity and sensor technologies' and TE is 'one of the leading providers of advanced automobile connectivity solutions' — one of, not the — while the segment's 'major competitors include Yazaki, Aptiv, Sumitomo, Sensata, Honeywell, Molex, and Amphenol'. Industrial Solutions 'is a leading supplier of products that connect and distribute power, data, and signals' and 'competes primarily against Amphenol, Hubbell, Carlisle Companies, Integer Holdings, Molex, Omron, JST, and Korea Electric Terminal (KET)'. Amphenol and Molex appear on both lists, so TE shares the top of the interconnect market rather than owning it. | co leader In single-wafer ALD, which is more than half of equipment sales, the report calls ASM 'the leader' with a 55%+ share. That share is ASM's own estimate; the Investor Day 2025 deck (https://www.asm.com/media/m3jhkm12/asm_investor_day_2025.pdf) sources it to 'ASM internal analysis and TechInsights'. With no independent share source, the band is held at co_leader rather than clear_leader. ASM does not lead every line: 'ASM has the number two share in the Epi equipment market', and in PECVD and vertical furnaces it is 'focused on niche portions of the market'. | co leader IDC's 1Q26 external enterprise storage systems tracker, as reported by Blocks & Files on 2026-06-16 (cited in full on the AFF/ASA product row below), ranks NetApp second worldwide behind Dell and ahead of Everpure, Huawei and HPE, attributing the placing to "its growing all-flash business and cloud-integrated data management". Second of five ranked vendors, in a market whose leader is someone else, is a shared front rank rather than an owned one - and the distinct claim NetApp makes in the FY2026 10-K is positional rather than volumetric: being "the only provider of enterprise-grade storage services natively embedded in the world's largest public cloud providers". |
| Pricing power | moderate The FY2025 10-K states both halves plainly: TE has 'experienced, and expect[s] to continue to experience, downward pressure on prices. However, as a result of increased costs and tariffs, certain of our businesses implemented price increases in recent years.' Pass-through, not price-setting. The realised result is margin expansion rather than erosion — gross margin of 31.5% of net sales in FY2023, 34.4% in FY2024 and 35.2% in FY2025 per the same filing's income statements, and 36.5% ($5,319M on $14,573M) for the nine months to 26 June 2026 versus 35.3% a year earlier, with Q3 FY2026 GAAP operating margin of 19%, per the 22 July 2026 results release (https://www.sec.gov/Archives/edgar/data/1385157/000110465926085589/tel-20260722xex99d1.htm). Strong would require pricing that leads rather than follows cost; weak is contradicted by three years of expanding gross margin. | moderate Gross margin rose from 50.5% to 51.8% in 2025 and was 51.9% in Q2 2026. But the report attributes the 2025 gain to 'a very strong mix, including a continued solid contribution from the Chinese market' and to efficiency programs, not to price. It targets a range of 47% to 51% for 2026-2030, and the Q2 2026 release expects full-year 2026 gross margin 'to be around 51%'. Buyers are concentrated: the 10 largest customers were about 72.3% of 2025 revenue, the five largest about 53.6%, and two customers each contributed more than 10% of total revenue. | moderate It holds price rather than raising it. On the figures filed with the FY2026 10-K, gross margin was 70.7% of revenue in FY2024 ($4,433M on $6,268M), 70.2% in FY2025 ($4,613M on $6,572M) and 70.7% in FY2026 ($4,899M on $6,925M) - flat across three years in which revenue grew from $6,268M to $6,925M - and it held that level while absorbing a component-cost shock. It is no stronger than that because the filing's own risk factor lists "competitive pricing, customer price sensitivity" and "pricing and discounting pressures" among the drivers of gross margin, and discloses that the company "experienced inflationary pressure and supply chain constraints beginning in the second half of fiscal 2026, resulting in increased costs for memory and other components, which have affected our gross margins" - a cost shock it is absorbing rather than fully passing on. |
| Summary | TE Connectivity sells the connectors, terminals, sensors and cable-protection parts that, in its own framing, 'enable the distribution of power, signal, and data' — a component vendor, never a system or compute vendor. The FY2025 10-K puts the two reportable segments, Transportation Solutions (54% of net sales) and Industrial Solutions (46%), against a combined served market it estimates at roughly $200 billion, which tells you immediately that no single share number governs this business: the filing discloses no market share, says 'no single customer accounted for a significant amount of our net sales in fiscal 2025, 2024, or 2023', and states that because TE is 'not organized by product or service, it is not practicable to disclose net sales by product or service'. The defensible part is entrenchment. Parts get designed in with the customer and then qualified to survive automotive, aerospace, subsea and grid conditions; TE sells about 75% of net sales direct into ~130 countries; relationships 'typically date back many years'. That is a switching-cost moat, and the filing is unusually candid that it is not a patent moat — no single patent or group of patents is material to its competitive position. The limit is equally plain in the filing: highly competitive industries, thousands of competitors, and persistent downward price pressure, with Amphenol and Molex named as competitors in BOTH segments and Yazaki, Aptiv and Sumitomo heading the Transportation segment's competitor list. The evidence that the moat is nonetheless working is margin plus mix. Gross margin ran 31.5% / 34.4% / 35.2% of net sales across FY2023-FY2025, and in the nine months to 26 June 2026 gross margin was $5,319M on $14,573M of net sales (36.5%) against $4,419M on $12,513M (35.3%) a year earlier, while Q3 FY2026 GAAP operating margin was 19% and orders hit a record $5.7 billion, up 27% year over year. Growth has also rotated: digital data networks grew 34.2% in Q3 FY2026 (34.0% organic) and 48.8% over nine months, with the CEO naming 'increased momentum in AI in both the data center and across the broader energy infrastructure' — while sensors, an end market for which the 10-K makes no leadership claim at all, shrank 2.8% organically in the quarter. Narrow, not wide: a real toll on other people's platforms, collected under admitted price pressure. | ASM International, headquartered in the Netherlands, makes wafer-processing equipment with a focus on deposition: single-wafer ALD, silicon epitaxy, PECVD, vertical furnaces, silicon-carbide epitaxy and, since its acquisition of Axus in December 2025, CMP. Spares & Services made up 23% of 2025 revenue. ALD is the core. It was the largest product line, 'clearly accounting for more than half of our equipment sales', and ASM estimates its single-wafer ALD share at 55%+. The report frames ALD as increasingly necessary, saying 'ALD is the only deposition technology capable of meeting the coverage and film-property requirements for complex 3D structures', and expects ALD layers to grow in GAA transistor stacks, backside-power architectures and future 4F² DRAM. Epitaxy is the second-largest line: the report says ASM holds the number two share there and lifted its leading-edge share from 12% in 2020 to 25% in 2024, both by ASM's own figures. 2025 revenue reached a record €3.2 billion at a gross margin of 51.8%; per the Q2 2026 results, Q2 2026 revenue was €1,003 million at 51.9%. The exposures are customer concentration (the five largest customers were about 53.6% of 2025 revenue), geography (Asia was 80% of revenue and China more than 30%), and export restrictions that the report says are 'impacting our ability to sell and service systems in certain jurisdictions and for certain customers'. | NetApp sells storage hardware but the asset is ONTAP, the data-management software that has run its arrays for over three decades and now also runs inside the three largest public clouds as a first-party service. The FY2026 10-K organises the company into two segments, Hybrid Cloud (AFF and ASA all-flash arrays, AFX for AI workloads, FAS hybrid-flash, E/EF-Series, StorageGRID object storage) and Public Cloud (Azure NetApp Files, Amazon FSx for NetApp ONTAP, Google Cloud NetApp Volumes, Cloud Volumes ONTAP), and states that both rest on the same ONTAP software. That is the whole argument: an enterprise that has standardised its snapshots, replication and multiprotocol access on ONTAP carries those habits with it when it moves workloads to a hyperscaler, and NetApp is paid on both sides of the move. The evidence that the lock has commercial value is the margin's steadiness: across the three years the FY2026 10-K reports, gross margin sat at 70.7%, 70.2% and 70.7% of revenue ($4,433M on $6,268M, $4,613M on $6,572M, $4,899M on $6,925M) while revenue grew, and the filing's own percentage-of-revenue table shows no mix shift doing that work - product and services held near 46% and 54% of revenue throughout. The limits are equally in the filing. NetApp is second, not first: IDC's 1Q26 tracker puts it behind Dell in external enterprise storage, and the 10-K's competition section concedes that cloud providers are simultaneously partners and rivals, that consumption models "may reduce overall demand for our traditional on-premises offerings sold through a capital expenditure (capex) model", and that alternative architectures "may reduce or eliminate demand for some of our offerings". Component exposure is real too: the filing discloses "inflationary pressure and supply chain constraints beginning in the second half of fiscal 2026, resulting in increased costs for memory and other components, which have affected our gross margins", and names NAND among the components whose supply can tighten. This is a durable second place built on software stickiness, not a structural monopoly. |
| Chain position | TE is an upstream component supplier to the AI build-out, not a participant in compute. It sells 'connectivity and sensor solutions [that] enable the distribution of power, signal, and data to advance next-generation transportation, energy networks, automated factories, data centers enabling artificial intelligence', about 75% of it direct to manufacturers across roughly 130 countries. AI exposure runs through one end market: digital data networks was 28% of Industrial Solutions, and Industrial Solutions was 46% of fiscal 2025 net sales — so the datacenter line is a minority of a company still 54% transportation. That minority is where the growth now is: digital data networks net sales rose 34.2% in Q3 FY2026 and 48.8% over the nine months, and energy rose 34.4% in the quarter, the CEO tying both to AI momentum 'in both the data center and across the broader energy infrastructure' (https://www.sec.gov/Archives/edgar/data/1385157/000110465926085589/tel-20260722xex99d1.htm). | Upstream wafer-fab-equipment supplier to logic/foundry and memory chipmakers. 'The leading-edge logic/foundry market was the main growth driver for ASM, on the back of 2nm investments' in 2025, advanced-node DRAM was the largest part of memory sales, and Asia was 80% of revenue. | NetApp sits between the memory supply and the enterprise data centre. Upstream, the FY2026 10-K says "Third-party component costs make up a significant portion of our product costs" and singles out NAND as hard to manage "if supplies of certain components, including NAND, become limited relative to demand". Downstream, the hyperscalers are channel, partner and rival at once: the filing states "We both partner with and compete against cloud service providers through our cloud-based software and services offerings", while Azure NetApp Files, Amazon FSx for NetApp ONTAP and Google Cloud NetApp Volumes are delivered as those clouds' own natively embedded services. Distribution is a mix of direct sales and "an ecosystem of partners, including the leading cloud providers". |
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| Long-horizon vote | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.13 at weight 0.20 · swarm neutral Editorial prior, not backtested. |