Delta anticipates boosted H2 earnings driven by increased demand for artificial intelligence
Delta Electronics Reports Record-Breaking Second-Quarter Revenue and Strong Gross Margin
Taiwan-based Delta Electronics Inc (台達電) has announced its second-quarter financial results, revealing a significant increase in revenue and gross margin.
The company's second-quarter revenue reached a record high of NT$124.04 billion (US$4.15 billion), marking a 19.91 percent year-on-year increase. This growth was primarily driven by the continued demand for power supply units and heat dissipation products for AI servers. In the second quarter, AI-related power supply units made up 22 percent of total revenue, while liquid cooling products contributed 5 percent.
Gross margin rose 1.4 percentage points year-on-year to 35.5 percent, with gross profit at NT$44 billion, a 25 percent increase from the previous year. Power electronics products accounted for 52 percent of Delta's total sales in the second quarter.
Vice President Lanford Liu of Delta mentioned power racks as a design trend, with a shift to these solutions likely due to Nvidia's expected launch of a new platform in 2027. AI-related products are expected to continue outperforming other segments in the second half, and to account for a larger share of total revenue. Cooling products are expected to remain modest in the second half.
Delta is activating three new factories in Thailand, with another three under construction. However, if the US tariff rate remains the same, Delta would not further expand its capacity in Thailand, given that the production of most modules, including heat-dissipating fans and fins, is based in Taiwan.
The company's net profit for the second quarter was NT$13.95 billion, with a record earnings per share of NT$5.37. Delta Electronics Inc (台達電) expects revenue for the second half of the year to exceed that of the first half.
However, there are no specific publicly available details on Delta Electronics Inc's expected revenue distribution for the second half of 2022 focusing specifically on AI-related products and power supply units. Market growth trends in related fields like data center UPS suggest increasing demand, but exact company-level revenue distribution data remains unavailable in the provided context.
Despite this, the strong performance in the second quarter and the positive outlook for the second half of the year indicate a promising future for Delta Electronics Inc. The company's focus on AI-related products and power supply units, combined with the growth in the data center UPS market, positions Delta well for continued success in the coming years.
The demonstrated growth in Delta Electronics Inc's second-quarter revenue can be attributed to the increased demand for AI servers, with AI-related power supply units composing 22% of total revenue in the quarter. In the forthcoming period, it is anticipated that AI-related products will continue to outperform other segments and account for a larger share of total revenue.
Artificial Intelligence, a significant factor in Delta Electronics Inc's recent success, is projected to remain a key driver of growth as the company positions itself for continued success in the coming years, with increasing demand observed in related markets like data center UPS.
