Delta Electronics Inc's Expansion Plans and Market Insights
Delta anticipates enhanced Q2 earnings prior to tariff impact
Delta Electronics Inc, a major player in power management and smart green solutions, is rolling out its plans to expand its prowess in Thailand. Though concrete details about the expansion are scarce, Delta (Thailand) PCL remains active in various initiatives, including winning acclaim for environmental sustainability and participating in corporate social responsibility projects [1]. Moreover, Delta is extending its solutions worldwide, notably in the electric vehicle (EV) space, exhibiting innovative powertrain and charging systems [3].
corporation's Q2 revenue is projected to exceed Q1's impressive 30% year-on-year increase, reaching NT$118.92 billion (US$3.71 billion) [2]. This anticipated growth comes in part due to US clients stockpiling orders in response to President Donald Trump's planned tariffs on Taiwanese goods, as he announced a 90-day tariff implementation freeze on April 9 [2].
As the third and fourth quarters remain uncertain, Delta chairman Ping Cheng affirmed the company's commitment to long-term investment and budget consistency [2]. Regarding the question of a potential Delta factory in the US, Cheng reasoned that the company already maintains production sites worldwide, and will meticulously evaluate factors beyond tariffs before deciding [2].
Delta currently has about 50% of its production capacity in China, but it continues to develop sites in Thailand and maintains substantial production capacity in Taiwan and India [2]. According to Cheng, Delta plans to designate Thailand as a secondary headquarters, as their Thai data center can communicate effectively with the main Taiwanese headquarters [2].
Delta's recent design collaborations with Nvidia Corp for new heat dissipation components for the GB300 server are still under discussion [2]. If power consumption continues rising, high-end products might necessitate the use of immersion cooling technology, allowing for further thermal design adjustments [2].
In the first quarter, Delta reported a stellar net profit of NT$10.23 billion, equivalent to NT$3.94 per share—the second-highest ever [2]. The impressive gross margin rose 2.3 percentage points year-on-year to 31.8 percent, with gross profit reaching NT$37.8 billion, an increase of 40 percent from the previous year [2]. Operating expenses increased by 21 percent in the first quarter due to higher machinery purchases, but are expected to decline in subsequent quarters [2].
Sales of power electronics products surged 39 percent year-on-year to NT$59.77 billion in Q1, accounting for 50 percent of Delta's total sales, followed by infrastructure (29 percent), automation (12 percent), and mobility (9 percent) [2]. The global trend towards energy conservation and carbon reduction is driving demand for e-mobility solutions, which is a significant focus for Delta [3]. Despite potential impacts from US tariffs, Delta's unwavering commitment to sustainability and its broad global focus align with prevailing worldwide trends.
- To counteract potential increases in power consumption, Delta Electronics Inc might consider adopting immersion cooling technology for their high-end products' thermal design, as discussed in their recent design collaborations with Nvidia Corp.
- In light of President Donald Trump's planned tariffs on Taiwanese goods, US clients have been stockpiling orders with Delta Electronics Inc, contributing to the corporation's Q2 revenue projection of exceeding Q1's 30% year-on-year increase.
- As part of its long-term investment strategy, Delta Electronics Inc plans to designate Thailand as a secondary headquarters, leveraging the effectiveness of their Thai data center in communicating with the main Taiwanese headquarters.
