Delta Electronics Co (台達電) on Monday posted its highest net profit for a second quarter, attributing the performance to growing shipments of power components for servers and automotive electronics, while output of thermal solutions for industrial automation remained steady.
Net profit in the three-month period to June rose 6.8 percent year-on-year to NT$8.15 billion (US$258.6 million), up 17.9 percent on a quarterly basis, the company said in a statement on Monday.
That translated into earnings per share (EPS) of NT$3.14, compared with NT$2.94 a year earlier and NT$2.66 in the previous quarter.
Photo: Fang Wei-chieh, Taipei Times
Second-quarter revenue was NT$100.55 billion, up 11.7 percent year-on-year and 8.3 percent quarterly, meeting market expectations.
Gross margin was 29.2 percent in the second quarter, down from 29.4 percent a year earlier, but up from 27.53 percent in the first quarter, mainly helped by a larger sales scale and earnings improvement for auto electronics.
Due to higher research-and-development expenses, operating margin fell by 0.5 percentage points to 10.23 percent from a year earlier, although it still improved 1.18 percentage points from the previous quarter.
For the first half of this year, Delta reported net profit of NT$15.06 billion, up 10.06 percent year-on-year, or EPS of NT$5.8, as revenue grew 12.1 percent and gross margin improved 0.02 percentage points from the same period last year.
The rapid adoption of generative artificial intelligence (AI) has triggered discussions over rising demand for power supplies for AI servers.
At an investors’ conference yesterday, Delta chairman Yancey Hai (海英俊) said the company expects higher contributions from AI server power supplies next year, as rush orders have continued to pour in and order visibility has extended into next year.
“In the short term, there is a lot of demand,” Hai said, adding that AI server power supplies generated about 15 percent of the company’s revenue from server power supplies.
“With an anticipated increase in AI applications in the future, there would be more AI servers coming,” he said, implying a promising outlook for related power supplies.
The company’s overall performance in the second half of this year is expected to be better than the same period last year, driven by the AI trend, while the business for data center power supplies is likely grow by a double-digit percentage this year, Hai said.
In addition to its AI-related business, the company’s power products for electric vehicles (EV) have also grown this year, Delta chief executive officer Cheng Ping (鄭平) told investors.
“The growth in EV business would probably double this year, in line with our expectations,” Cheng said.
With stable orders from customers, sales of power products for EVs are forecast to continue to grow next year, he added.
Yuanta Securities Investment Consulting Co (元大投顧) is optimistic about Delta's business outlook, saying the company would retain growth momentum this quarter, driven by automotive electronics and AI server-related products.
"For the third quarter, we expect consumer electronics demand to resume a normal seasonal pattern, with EV and server power supply the main drivers," Yuanta said in a note yesterday. "We expect AI server power supply shipment ramp-up in the third quarter and expanding auto electronics segment sales to offset the impact of slower demand in networking, charging stations and industrial automation."
Meanwhile, Delta on Monday announced plans to reconstruct its plant in Taoyuan’s Jhongli District (中壢), at a cost of NT$2.48 billion, as the company aims to optimize its production efficiency.
This story has been updated since it was first published.
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS