Delta Electronics Inc (台達電), power management solution supplier, expects its electric vehicle component revenue to enjoy a high-speed growth rate this year, thanks to a significant improvement in raw material supply constraints, a larger production scale and increases in customer orders.
The company last year experienced solid growth in EV power supply units, despite supply constraints in chips and other raw materials capping some shipments, Delta said.
However, as the pressures ease this year, Delta expects growth to be even “faster than last year,” company chairman Yancey Hai (海英俊) told an investors’ conference.
Hai said he is bullish about the world’s EV market growth this year as traditional automakers such as Ford and Toyota are joining Tesla Inc to introduce new EV models in response to growing trends in the market.
“Many new EV models are equipped with Delta’s components,” Hai said.
With robust momentum, Delta expects its EV component business unit to show a profit this year, Hai said.
Delta supplies a wider range of EV components, including on-board battery chargers, battery power management systems and direct-current converters.
The company counts major automakers from the US, Europe and Japan as its customers, with major US automaker Ford being a prominent client, Hai said.
Delta also made progress in expanding its EV piles business, as the private sector joined government agencies to deploy charging stations to satisfy demand, Hai said.
In Taiwan last year, the company generated significant revenue from EV piles, he said, adding that revenue would increase this year.
Regarding increasing competition, Hai said that Delta has been in the EV business for many years and has expertise in operating smart grids, while newcomers undervalue the “potential risks” in tapping into this market.
Delta’s power electronics unit, its largest revenue contributor, last year experienced strong revenue growth of 21 percent year-on-year to NT$227.31 billion (US$7.48 billion), although the business unit’s profit grew at a faster pace of 50 percent annually to NT$32.15 billion.
Looking ahead, Delta’s EV, cloud-based devices and automation systems units are expanding quickly, with the exception of components used in consumer electronics such as PCs and mobile phones, Delta CEO Cheng Ping (鄭平) said.
Gross margin is to hold steady this year, compared with 28.8 percent last year.
Delta on Wednesday reported net profit last year grew 21.9 percent year-on-year to NT$32.67 billion, due to rising shipments of products used in servers, data centers, EVs and building automation products.
Delta said its board of directors approved a plan to pay a cash dividend of NT$9.84 per share this year, representing a payout ratio of 78.22 percent as the company’s earnings per share last year reached a record NT$12.58.
As the nation’s leading power and thermal solutions provider, Delta last year distributed a cash dividend of NT$5.5 per share to shareholders.
The proposed payout for this year is subject to shareholder approval at the company’s annual general meeting on June 13, Delta said in a regulatory filing on Wednesday.
Additional reporting by Chen Cheng-hui
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