Delta Electronics Inc (台達電) yesterday said it aims to increase revenue from its electric vehicle solutions business group (EVSBG) fivefold to US$500 million per year by 2022, supported by steadily growing demand from global automakers.
“We are optimistic about the outlook of EVSBG. Delta plans to allocate more resources to this business group to achieve our revenue goal,” Delta chairman Yancey Hai (海英俊) told a media briefing after the firm’s annual general meeting at its research and development center in Taoyuan.
The nation’s biggest power management unit supplier provides direct current to direct current inverters, onboard chargers, charging stations and electric motors.
It is not easy to obtain orders for electric vehicles because of the vehicles’ longer life cycles, and it usually takes at least five years for automakers to develop new models due to safety standards, Hai said.
However, once it receives an order, Delta can secure 100 percent order allocation for eight to 10 years, because automakers usually do not have secondary suppliers, he said.
“It [EVSBG] is a steady and good business for Delta for the long term,” Hai said.
Clients include Tesla Inc, General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV, while its products have also entered the supply chains of European and Chinese automanufacturers, Delta said.
Given its expanding client base and increasing revenue from electric vehicle products, Delta approved a corporate structural change to separate the electric vehicle solutions business from the power electronics segment into a new business group last month.
“We plan to hire at least 100 more research and development employees in Taiwan and overseas to support the business,” Hai said.
Delta is to increase investment in new technologies and purchase equipment for the new group, Hai said, without disclosing the size of the investment.
Delta will continue to look for merger and acquisition targets in the industrial automation solutions field, such as suppliers of permanent magnetic motors or reduction gears for robots, Hai said.
Next quarter is expected to outperform this quarter, supported by traditional peak-season demand for components used in PCs and smartphones, Hai said.
Demand in the PC industry this year is better than in the past few years, due to a rising number of cyberattacks prompting demand for new PCs, he added.
Delta shareholders yesterday approved a plan to distribute a cash dividend of NT$5 per share, based on the firm’s earnings per share of NT$7.24 last year. That translates into a payout ratio of 69.06 percent.
The dividend distribution suggests a yield of 3.03 percent, based on its closing price of NT$164.5 in Taipei trading yesterday.
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