Delta Electronics Inc (台達電) yesterday reported record third-quarter results after the power and thermal solutions provider raised prices.
Net profits rose 86 percent quarterly and 11 percent annually to NT$6.09 billion (US$196.55 million), with revenue of NT$63.62 billion, up 10 percent from the previous quarter and 6 percent higher compared with a year ago. Earnings per share were NT$2.35.
The gains were primarily driven by a rise in passive components sales and higher pricing for power electronics, Delta chairman Yancey Hai (海英俊) told an investors’ conference in Taipei.
Since the end of the first half of the year, Delta has been renegotiating with customers to raise prices by 3 to 5 percent to reflect shortages and rising costs of labor and raw materials, Hai said.
More favorable pricing supported profitability growth, with gross margin improving by 2.8 percentage points to 27.9 percent, leading to NT$17.8 billion in gross profits, up 23 percent from a quarter ago and 10 percent from a year earlier.
Operating margin for the quarter rose from 6.1 percent at the end of June to 9.4 percent, with operating profits soaring 70 percent to NT$5.9 billion and besting last year’s performance by 9.4 percent.
“We could see modest gains in revenue for this quarter, supported by robust demand for data center, communication, passive components and automotive electronics,” Hai said, as he gave an optimistic outlook on margins.
The power electronics business, which accounts for 52 percent of the company’s top line, rose 17 percent last quarter, but industrial automation dipped 6 percent.
“Part of that is cyclical, but some of our Chinese customers have cut back procurement due to trade war uncertainties,” Hai said.
“Delta is a business-to-business enterprise and it is up to our customers to gauge the impact on end-consumer demand,” Hai said, adding that the outlook remained murky.
As for automotive electronics and electric vehicles, a new area the company has been developing, revenue contribution to date this year has tripled, he said.
The new business accounted for just about 1 percent of its top line, but order visibility in the next two to three years is clearer, he added.
However, much like its experience in the PC sector, Delta is prepared to bear the pressure of yearly price cuts demanded by customers.
“We are fully prepared to cut prices by as much as 5 percent each year, for a number of years,” Hai said.
The situation would be helped by the still-sizable price premium for electric cars over conventional automobiles, he said.
Another area company is looking at is future 5G networks, which would bring new product specifications across the supply chain.
“5G is coming a lot quicker than we think,” Hai said.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS