Delta Electronics Inc (台達電) yesterday said revenue in the second half of this year is expected to surpass the first half, on the back of continued demand for power supply units and heat dissipation products for artificial intelligence (AI) servers.
Most large-scale cloud service providers continue to maintain high capital expenditures, lending support to the power supply unit business, Delta chairman Ping Cheng (鄭平) said.
AI-related products are expected to account for a larger share of total revenue in the second half, Cheng said, adding that AI-related power supply units made up 22 percent of second-quarter revenue, while liquid cooling products contributed 5 percent.
Photo courtesy of Delta Electronics Co
Delta vice president Lanford Liu (劉亮甫) said that power racks have become a design trend and a shift to those solutions appears likely, as Nvidia is expected to launch a new platform in 2027, although much depends on silicon design progress.
The company is activating three new factories in Thailand, with another three under construction, Cheng said.
As US tariffs for products made in Thailand remained uncertain, with a rate set at 36 percent, Delta would not further expand its capacity there if the rate stays the same, he said.
Meanwhile, as the supply chain for its liquid-to-air cooling systems is still primarily based in China, relocating production could pose capacity challenges, Cheng said.
Most modules, including heat-dissipating fans and fins, are assembled in Taiwan, he added.
Delta’s second-quarter revenue rose 19.91 percent year-on-year to NT$124.04 billion (US$4.15 billion), a record high for a single quarter, but was still below expectations due to the sharp appreciation of the New Taiwan dollar, company investor relations manager Rodney Liu (劉致遠) said.
Power electronics products accounted for 52 percent of Delta’s total sales in the second quarter, followed by infrastructure products at 28 percent, automation devices at 11 percent and mobility applications at 9 percent.
In the second quarter, Delta’s net profit reached NT$13.95 billion, with a record earnings per share of NT$5.37, driven by growing demand for AI power supply products and heat dissipation components, despite foreign exchange losses of NT$180 million in the quarter, Liu said.
Gross margin rose 1.4 percentage points year-on-year to 35.5 percent, while gross profit reached NT$44 billion, up 25 percent from a year earlier, also the highest on record.
Gross margin for the second half is expected to be similar to last year’s level, with AI-related products continuing to outperform other segments, cooling products to remain modest and mobility products to fall from a year earlier, Cheng said.
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