Delta Electronics Inc (台達電) yesterday said that sales of its industrial automation products saw double-digit growth in the first three quarters of the year, following years of development.
Rising labor costs and personnel shortages have made market conditions more favorable for the global industrial automation sector, and the company is expecting to see its investments bear fruit in the near term, Delta chairman Yency Hai (海英俊) told an investors’ conference in Taipei.
The majority of growth in industrial automation is from industrial servo motors and modules, as well as programmable logic controllers, Hai said.
Although sales contribution remains limited for the robotics-related business, the niche market has great growth potential going forward, he added.
Demand for automation has been robust in recent years, with technology, aerospace, automotive and “renewable energy” representing the biggest growth areas, while a few traditional sectors have also reported growth in automation equipment orders lately, HSBC Securities Taiwan Corp said in a report on Sept. 23.
Hai said that industrial automation has a long development cycle, with some clients having tested solutions for as long as two years, but have not yet deployed automation systems on their production lines.
“While automation solutions are hard to market, clients will be reluctant to change suppliers once the systems are deployed,” Hai said.
Meanwhile, the company has set its sights on cutting 90 percent of direct labor in the next five years by deploying its own automation solutions.
Many automation solutions are deployed by their developers to help instill confidence among clients, he said.
The company is aiming to establish a presence in the higher tiers of the automation market, such as machine-to-machine communications systems that reduce the need for human intervention.
“We are aiming to establish the company as a leader of industrial automation as we have done with power-supply units,” Delta Electronics chief executive officer Cheng Ping (鄭平) said, adding that the global market for industrial automation is estimated at about US$200 billion per year.
The company is also looking to expand into the automotive market and expects sales of items such as car lights and electric windows from the segment to contribute 20 to 30 percent of sales.
Hai said Delta has allocated significant resources into the nascent electric-car market, where the sector’s uncertain prospects have been boosted by reports of Tesla Motors Inc’s first quarterly profit in more than three years last quarter.
Delta on Thursday reported net profit of NT$5.67 billion for the third quarter, or earnings per share of NT$2.18.
Consolidated sales last quarter were NT$57.07 billion, 8 percent higher than the previous period and 2 percent higher than a year earlier.
In the first three quarters this year, net profits totaled NT$13.85 billion, up 2.1 percent year-on-year, with EPS of NT$5.33, the company said.
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