Dear Shareholders,

In 2022, there was a tightening of monetary policy in major international economies, as well as high inflationary pressures and ongoing pandemic lockdowns in many countries. All of this has led to global instability; however, imbalances in supply chains since the outbreak have gradually eased. The collective efforts of all members of Delta have contributed to the growth of the Company’s annual revenue and earnings per share (EPS). The consolidated revenue in 2022 was NT$384.4 billion, a 22.2% increase from the previous year; gross profit was NT$110.8 billion with a gross profit margin of 28.8%; net operating profit was NT$41.4 billion with a net profit margin of 10.8%; net income after tax was NT$32.7 billion with a net after-tax profit margin of 8.5%; EPS was NT$12.58 and return on equity (ROE) ratio was 19.13%. Here is a summary of the performance and status of Delta’s core business categories in 2022.

Power Electronics

In Power Electronics Delta stands firm as a global business leader providing AC/DC and DC/DC power supplies, brushless DC fans and thermal systems, and the miniaturization of key components. Its product lineup also covers various application markets, such as industrial, medical, automotive, household, satellite, information communication, and others.

Delta’s latest 3200W titanium-grade server power supply CRPS is designed with Gallium Nitride (GaN). Compared to SiC-MOSFETs with the same volume, the titanium-grade server power supply CRPS designed with GaN components can have its power density increased by 25% and its power efficiency improved further from 94% to 96%. With this high-frequency design, the size of the power supply can also be greatly reduced, and the saved space can be used for capacitor settings. If the power of a data center fails without warning, the buffer time can then be extended by as much as 30% through the capacitor, further strengthening system reliability. As a global expert in power management and thermal solutions, Delta has been recognized by the U.S. Environmental Protection Agency (EPA) for its excellent product performance and energy efficiency over the years. In 2022, Delta was named an ENERGY STAR® Partner of the Year for the seventh consecutive year, having also received the Sustained Excellence Award, the highest honor from ENERGY STAR® for five consecutive years.

Delta has invested in the automotive and electric vehicle markets for more than a decade. In addition to providing automotive components, such as automotive inductors, automotive fans, and others, Delta is a direct supplier of key vehicle systems such as power management systems, motor drives, motor controllers, and more, to the world's largest automakers. To accelerate the development of electric vehicles, Delta signed an MoU in 2022 with automotive semiconductor manufacturer NXP Semiconductor, establishing a joint laboratory that will help Delta speed up its product development and verification time, reduce development costs, as well as improve product efficiency, power density, and system integration capabilities.

Automation

Not only do Delta's industrial automation products and solutions enable many customers around the world to build more flexible and resilient smart manufacturing lines, but they also help customers progressively achieve their sustainable goals of energy conservation and carbon reduction.

In fluid automation, the equipment used for controlling liquid or gas is indispensable and important to business operations, public life, and even national infrastructure. However, a large proportion of fluid equipment often needs to operate continuously for long periods of time, and this consumes a significant amount of power. Delta’s solutions can help customers improve product performance and energy consumption. Moreover, an administrator can monitor the operation status of all equipment and power usage information from the back-end management platform and formulate an optimal power consumption strategy accordingly, resulting in considerable energy savings.

Infrastructure

The data center industry is booming with the massive increase in cloud services. However, while cloud computing is being implemented, the surge in power consumption and heat dissipation associated with high-performance computing poses new challenges to the stability of information systems and carbon management. Delta's "two-phase immersion cooling" data center solution combines the latest technology with innovative mechanisms designed to immerse electronic equipment directly in non-conductive, low-boiling point and easy-to-evaporate liquid coolant. Through a phase-change cooling system, heat is taken away and the heat exchange process is reduced, while improving heat dissipation efficiency. Compared to traditional air-cooled heat dissipation designs, Delta’s solution reduces energy consumption by a substantial 84%.

In 2022, as border restrictions and global supply chain bottlenecks gradually eased in Europe and the United States, Delta's communication power supply business, network communication products, energy storage business, and electric vehicle charging business all achieved new milestones. Delta supplied about 250 DC and AC chargers during the 2022 G20 and B20 summits held in Bali, Indonesia, providing charging services for nearly a thousand electric vehicles. As a service provider, Delta offers a series of comprehensive charging equipment solutions to meet the charging needs of electric buses, electric cars, and electric locomotives. Delta’s background system integration technology and software connection capabilities can effectively improve the operational efficiency of charging stations.

At the same time, the Lanyu energy storage system that Delta handed over to the Taiwan Power Company for operation in June 2022 has helped solve their problem of peak demand due to the summer influx of tourists. Unlike expensive and highly polluting diesel generators, Delta's energy storage system can effectively strengthen the stability of Lanyu's power system, thus resolving power supply issues in the outlying islands.

In response to the 1.5°C pathway for keeping global warming under control, Delta has formulated a long-term target of achieving "Net Zero" emissions at all global operating sites by 2050. Delta became the first in the technology hardware and equipment industry in Asia and the 125th company in the world to pass the SBTi’s Net Zero target review.

In the 2022 climate change report published by CDP (formerly known as the Carbon Disclosure Project), Delta was selected for a double A List rating on the two environmental issues of "climate change" and "water security management". In the 2022 Dow Jones Sustainability Indices (DJSI) evaluation, Delta's overall performance in the social dimension also scored at the 100% percentile in the global electronic equipment industry, which shows that Delta continues to strengthen its people-oriented core values amid the global trend of energy conservation and carbon reduction. In addition, Delta has not only been selected as the best international brand in Taiwan for the twelfth year, but its brand value has also increased by another 8% since 2021, reaching US$426 million, a record of ten consecutive years of growth.

Delta officially began its second 50 years in 2022. Consistently combining business development and sustainable goals in its operations, Delta aims to achieve a sustainable future through energy-saving technologies. With sincere thanks to all employees, customers, shareholders, and partners for their long-term support, Delta will continue to work together with all its colleagues to reach its next peak of business success going forward.

Finally, wish everyone good health and good luck.