Delta Electronics says AI will fuel ‘double-digit' growth
The SET-listed maker of components for data centres and electric vehicles is increasing investment to fuel its expansion, Mr Cheng said in an interview. The company also plans to raise its sales forecast for the second half 2025, he said, without disclosing the estimate.
AI-related products, such as networking and data-centre power equipment, will account for half of Delta Thailand's sales by the end of the year, up from 42% in the latest quarter, the company forecasts.
Thailand's biggest listed company by market capitalisation is among the Southeast Asian suppliers benefiting as customers including Nvidia expand in the region and beyond to tap rising demand for services such as generative artificial intelligence.
'All the applications involving AI will continue to grow,' Mr Cheng said. 'This business is not slowing down.'
Among challenges is a US tariff of 19% on imports of Thai goods, though Mr Cheng said he isn't too worried as the company can 'pretty much pass on all the tariffs to customers'. The US accounts for as much as 35% of Delta Thailand's sales, he said.
Second-half performance will benefit from a refund of some of the tariffs Delta Thailand had to pay upfront to customers earlier in the year, the company says. The United States recently set Thailand's tariff rate at 19% after previously threatening 36%.
With Nvidia and its peers releasing new AI hardware at a rapid clip, Delta and its competitors are under pressure to deliver everything from power supply to thermal heating solutions to fit the advanced computing equipment.
Data centre capacity in the Asia-Pacific region will more than double by 2030, requiring investment of more than $800 billion, according to Moody's Corp.
'Momentum is strong,' Mr Cheng said. 'The data-centre segment is the one that's propping up our both top lines and bottom lines.'
Delta shares trading on the Stock Exchange of Thailand have more than doubled from an April low, bringing its SET-leading market capitalisation to 1.9 trillion baht, far ahead of local peers.
In November, the SET introduced trading curbs on the company's shares after its surging price triggered a surveillance mechanism.
'I continue to say that I don't like the stock price to be too high,' Mr Cheng said. 'If it's so high I don't know how well it will be sustained and somebody is going to get hurt.'
Analysts say Delta is one of just a few Thai companies well-positioned to benefit from the data centre boom. The company is expanding its research and development operations in Thailand by hiring more designers and entering new areas such as thermal simulation engineering.
It has recruited more than 100 engineers this year, bringing the total to about 400 in the country. Overall, Taiwan-based Delta has about 20,000 employees in Thailand, its biggest global base.
Its two new production facilities in the Wellgrow industrial estate in Chachoengsao will come online in the fourth quarter. The additional capacity will help it meet demand for power thermal solutions and other components.
'In the next few years, AI and digitisation being smarter and faster will support our growth,' Mr Cheng said. 'We just want to maintain this double-digit growth' and 'discipline in our profit margin management'.
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