Delta Electronics Inc (台達電) yesterday said that it would continue to seek acquisition targets to diversify its production base to mitigate the effects of the escalating US-China trade war.
The company approved a conditional voluntary tender offer through its subsidiary Delta Electronics Int’l (Singapore) Pte to wholly acquire outstanding shares of Delta Electronics (Thailand) Public Co (DET) to bolster its global manufacturing reach and to boost sales in Southeast Asia.
Delta Electronics, which holds a 20.93 percent stake in DET through its Singaporean subsidiary, is looking to spend up to US$2.14 billion to acquire all of the remaining shares in its Thailand-listed associate company at 71 baht per share, representing a 15 percent bid premium.
While the effects of the first wave of tariffs on Chinese exports to the US are estimated to be limited to about US$5 million, it is difficult to gauge the full extent to the end market, Delta chairman Yancey Hai (海英俊) said, adding that growing uncertainties are likely to diminish investment and spending across industries.
DET, which has been an investee of Delta since its founding in the late 1980s, is an ideal addition to Delta’s manufacturing bases, as Thailand has an established electronics supply chain, Hai told a news conference at the Taiwan Stock Exchange on Tuesday evening.
The Thai company also has manufacturing bases and sales operations in India and Slovakia, bringing additional flexibility for Delta to cope with further tariff moves in other markets.
“Integrating DET would be much quicker compared with beginning anew elsewhere,” Hai said.
Delta intends to keep DET listed on the Thai bourse, as it has long been a fixture among the country’s blue-chip stocks,” Hai said, adding that the company hopes to complete the stake purchase in the next three to six months.
Delta’s diversification plans also extend to Taiwan as it has approved a plan to spend NT$2.7 billion (US$88.19 million) building a third plant at the Southern Taiwan Science Park in Tainan, as well as another NT$1.5 billion on a new research and development center in Taipei.
Delta said that its cash position and bank credit line are more than enough to fund the purchases.
While a portion of the US tariffs is aimed at industrial automation products, Delta is not planning to move its industrial automation manufacturing to Thailand from China, Hai said.
DET is well-positioned to tap into the automotive and electric-vehicle markets, with the categories representing about 10 percent of the Thai company’s annual top line, Hai added.
Automotive only accounts for about 1 to 2 percent of Delta’s annual sales, company data showed.
Delta reported that net income in the past quarter dropped 23 percent annually to NT$3.3 billion, with sales rising 8 percent annually to NT$57.9 billion. Earnings per share were NT$1.26.
During the period, sales contributions from automation and infrastructure rose to 17 and 33 percent respectively as the company cut lower-margin power electronics.
In particular, the sales contribution from automation in the past quarter rose 20 percent annually to NT$10 billion, with infrastructure sales gaining 13 percent annually to NT$19.03 billion.
Hai expects the company to see less pressure on profitability from an ongoing shortage of key components, including metal-oxide-semiconductor field-effect transistors, and other passive components.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six