Delta Electronics Inc (台達電), the nation’s leading power management provider, yesterday said its operations this quarter would likely outpace last quarter due to increasing orders for its automation and networking products.
“Revenue from industrial automation and networking grew by double-digit percentages last quarter from a year earlier. We expect the momentum to extend into this quarter,” Delta chairman Yancey Hai (海英俊) told an investors’ conference in Taipei.
Hai declined to offer a range, citing regulations set by the Financial Supervisory Commission.
Industrial automation is driven mainly by the Chinese market, which contributes 50 percent to Delta’s industrial automation business, Hai said.
Chinese demand is steadily expanding as the nation increases the pace of its “smart” manufacturing, Hai said, adding that rising labor costs in China also drives manufacturers to automate.
Delta also expects orders from European and US markets to surge.
“We secured significant orders from a large new US machine toolmaker,” Hai said, without elaborating.
Looking forward, Hai said that orders for power switches, power supplies for servers and cooling systems would grow in tandem with the growing number of data centers being installed around the world.
The company remains positive about its passive components business and expects robust demand for power chokes used in smartphones in the second half, Hai said.
“Due to a specification upgrade, the number of power chokes used in new smartphones will increase by 20 percent compared with previous devices,” Hai said.
In an effort to meet the increasing demand for chokes, Hai said Delta’s expansion of its production capacity for passive components would finish at the end of this quarter and become operational in the next quarter.
The company last month announced it would spend US$100 million to expand the capacity of its passive components subsidiary in China, its largest expansion plan since 2013.
Delta yesterday reported financial results for the January-to-March quarter, with net profit reaching NT$3.91 billion (US$129.39 million), or NT$1.51 per share, flat from the year-earlier level of NT$3.88 billion, or NT$1.5 per share.
First-quarter revenue rose 3 percent annually to NT$48.92 billion, while gross margin improved 0.26 percentage points year-on-year to 27.2 percent and operating margin dropped 0.02 percentage points to 8.11 percent, the company said.
While the New Taiwan dollar appreciated 6 percent against the US dollar in the first quarter, the company still booked NT$143 million in foreign-exchange gains due to its sound risk management on currency exchanges, Delta said.
“We have a team and a set of measures to oversee the foreign currency fluctuation. We are confident that Delta could achieve its internal goal this year without having to worry about currency,” Delta chief financial officer Judy Wang (王淑玲) said.
Delta shares fell 0.58 percent to close at NT$170 yesterday in Taipei trading. The stock has advanced 6.58 percent so far this year, Taiwan Stock Exchange data showed.
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