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.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
Micron Memory Taiwan Co (台灣美光), a subsidiary of US memorychip maker Micron Technology Inc, has been granted a NT$4.7 billion (US$149.5 million) subsidy under the Ministry of Economic Affairs A+ Corporate Innovation and R&D Enhancement program, the ministry said yesterday. The US memorychip maker’s program aims to back the development of high-performance and high-bandwidth memory chips with a total budget of NT$11.75 billion, the ministry said. Aside from the government funding, Micron is to inject the remaining investment of NT$7.06 billion as the company applied to participate the government’s Global Innovation Partnership Program to deepen technology cooperation, a ministry official told the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s leading advanced chipmaker, officially began volume production of its 2-nanometer chips in the fourth quarter of this year, according to a recent update on the company’s Web site. The low-key announcement confirms that TSMC, the go-to chipmaker for artificial intelligence (AI) hardware providers Nvidia Corp and iPhone maker Apple Inc, met its original roadmap for the next-generation technology. Production is currently centered at Fab 22 in Kaohsiung, utilizing the company’s first-generation nanosheet transistor technology. The new architecture achieves “full-node strides in performance and power consumption,” TSMC said. The company described the 2nm process as
JOINT EFFORTS: MediaTek would partner with Denso to develop custom chips to support the car-part specialist company’s driver-assist systems in an expanding market MediaTek Inc (聯發科), the world’s largest mobile phone chip designer, yesterday said it is working closely with Japan’s Denso Corp to build a custom automotive system-on-chip (SoC) solution tailored for advanced driver-assistance systems and cockpit systems, adding another customer to its new application-specific IC (ASIC) business. This effort merges Denso’s automotive-grade safety expertise and deep vehicle integration with MediaTek’s technologies cultivated through the development of Media- Tek’s Dimensity AX, leveraging efficient, high-performance SoCs and artificial intelligence (AI) capabilities to offer a scalable, production-ready platform for next-generation driver assistance, the company said in a statement yesterday. “Through this collaboration, we are bringing two
RSS