Dear Shareholders,

Despite signs of moderate recovery in 2024, global economic performance remained notably divided. While the data center market related to artificial intelligence (AI) continued to experience rapid growth, many other application markets appeared relatively sluggish. Against this backdrop, Taiwan’s economic performance stood out among developed economies, largely driven by the surge in AI applications, fueling strong demand for information and communications technology (ICT) equipment and electronic components. This, in turn, provided significant momentum for the growth of both Taiwan’s economy and its electronics manufacturing sector.

In 2024, Delta’s consolidated revenue was NT$421.1 billion, a 5% increase from the previous year; gross profit was NT$136.6 billion with a gross profit margin of 32.4%; net operating profit was NT$47.7 billion with a net profit margin of 11.3%; net income after tax was NT$35.2 billion with a net after-tax profit margin of 8.4%; EPS was NT$13.56 and return on equity (ROE) ratio was 16.4%. Both annual revenue and EPS have grown. Here is a summary of the performance and status of Delta’s core business categories in 2024.

Power Electronics

With over a half century of expertise in power electronics technology, Delta has consistently maintained our leadership in power management and thermal solutions. In recent years, global semiconductor giants have introduced high-performance chips designed to support AI applications, resulting in a substantial increase in demand for power supplies. Concurrently, the requirements for critical power specifications, including power instantaneous, power density, and energy efficiency, have continued to increase.

Leveraging our expertise in key technologies, Delta remained at the forefront of the industry, consistently leading the market with the introduction of significant new products in the fields of power solutions for data center and server, as well as power conversion for GPUs. In the field of power supplies for data center racks, Delta’s latest power shelves, compliant with the Open Rack v3 (ORV3) standard of the Open Compute Project, deliver a power output of 33 kW (21-inch 1OU). This represents an over 83% increase in power output compared to the 18-kW model introduced in 2023, with energy efficiency reaching up to 97.5%. Additionally, Delta has taken the lead in the industry by downsizing the 33kW, 21-inch power shelves to a 19-inch (1RU) specification, enabling AI transformation or upgrades for existing data center servers. In response to the significant load that AI servers place on power grids when processing large volumes of high-speed data, which could potentially lead to server overloads and power outages, we have introduced our brand new 19-inch (1RUs) and 21-inch (1OU, ORV3-compliant) high-power Peak Load Shaving Shelf (PLSS). These devices, equipped with built-in lithium-ion capacitors, provide surge rectification and filtration, along with backup power (delivering 20 kW power output for 15 seconds), stabilizing power delivery to AI servers and ensuring efficient and reliable operations. Additionally, Delta introduced an 8kW DC power distribution board designed for effective DC voltage conversion at the AI chip board. This board features two 4kW DC power modules that convert power from a 50V input down to 12V, supplying energy to two GB200 super chips within the server. This system delivers a total output power of 14.4 kW while achieving an energy conversion efficiency of 98.2%.

In the field of data center thermal management, Delta has expanded our product portfolio to include both air and liquid cooling technologies, offering flexible solutions that address the infrastructure needs of both newly constructed and existing data centers. In response to the growing demands for thermal solutions driven by the increase in AI applications, Delta has introduced a liquid-cooled Cold Plate Loop specifically designed for the latest generation of AI GPUs and CPUs. This module features an advanced microchannel cold plate design and technology that balances liquid flow, ensuring exceptional thermal performance and efficient system operation, complemented by the high-performance Coolant Distribution Unit (CDU), a core component that further enhances the overall efficiency of the liquid-cooled rack. Delta’s liquid cooling solutions have received approval from leading global cloud service providers (CSPs) and original design manufacturers (ODMs) and have entered the production phase. As demand for AI servers and racks continues to rise, these products are expected to gradually scale up in shipment volumes.

In the field of passive components, Delta’s Board of Directors approved an investment of US$ 68.5 million in January 2025 to acquire the power inductors and powder materials business from the Japan-listed Alps Alpine Co., Ltd. and its subsidiary Alps Electric Korea Co., Ltd. This acquisition includes production and R&D equipment, along with relevant patents and intellectual property assets, which we plan to integrate with the magnetic component technologies developed by our subsidiary, Cyntec Co., Ltd. This integration will achieve synergies in both technology and market reach. Alps Alpine’s proprietary powder material patent technology enables the development of low-power-loss power inductors that improve the energy efficiency of devices and equipment. We anticipate this acquisition will further strengthen Delta’s position in the application of passive components across various sectors, including data centers, AI high-performance computing, edge computing, electric vehicles, smartphones, and next-generation information and communication products.

Automation

In the field of industrial automation, Delta has introduced the Digital Twin solution, which enables both the pre-testing of equipment specifications and production line planning during the phase of new product introduction, ensuring seamless integration between the virtual and physical worlds. This solution will be applied throughout the entire product lifecycle, from design and equipment commissioning to mass production. Additionally, our virtual machine development platform DIATwin creates virtual models of product processes by automatically generating and optimizing production parameters through AI computing, thereby reducing the time required for new product trials by up to 50%. When paired with modularly designed physical equipment, this solution successfully contributed to a leading electronics assembly manufacturer in Taiwan reducing their setup time by over 80% and accelerating the mass production timeline for new products. Furthermore, integrating our Line Manager software into the production process achieves real-time management of the entire production line, improving production capacity by 3 to 4 times and reducing material waste, thus achieving energy savings and carbon reduction.

The newly constructed Chungli Plant 6 will serve as Delta’s Smart Manufacturing Innovation Center. In addition to offering both virtual and physical training programs, this center leverages IoT technology to transmit equipment data, automatically generate optimized processing paths, and simulate them on a virtual platform. This enables customers to familiarize themselves with equipment operations and plan for full-line integration, thereby accelerating their transition toward the factory of the future.

Delta has actively advanced our building automation business for many years. Our solutions have been successfully implemented in commercial buildings and progressively expanded into more complex campus environments. In 2024, Delta implemented a smart campus solution for the Taiwan International Ports Corporation, Ltd., Taichung Branch at Taichung Port. This solution integrates systems such as central monitoring, security surveillance, smart lighting, and smart energy management into a unified management platform, enabling real-time monitoring and management for the port’s diverse facilities and equipment. This enhances operational efficiency while ensuring the security of the port area. The smart energy management platform integrates data on electricity, water usage, and renewable energy, visualizing carbon emissions and overall energy consumption metrics. The solution is built with a highly scalable system architecture, designed to support future integration with EV charging and energy storage systems, driving Taichung Port toward its goal of becoming a smart harbor and realizing its vision of a low-carbon, sustainable future.

Infrastructure

In the field of ICT infrastructure and in response to the rapidly growing demand for data center construction, Delta leverages its extensive power planning expertise and comprehensive product portfolio to develop highly efficient supply systems with flexible power, covering medium-voltage utility power supply to server-level requirements. These systems effectively enable customers to reduce both operational costs and time. To address the thermal challenges posed by AI computing, we have also introduced integrated solutions that combine both air and liquid cooling technologies. These include the Liquid to Air Systems, which can upgrade existing air-cooled data centers, and the 1.5MW Liquid to Liquid Coolant Distribution Unit (CDU), which is capable of managing the thermal demands of dozens of high-density racks exceeding 100 kW, and ensuring stable operations in complex and dynamic application environments. In the field of energy infrastructure, Delta has not only partnered with McDonald’s France to install 200kW supercharger stations in over 700 restaurants, addressing consumers’ needs for immediate charging, but has also responded to the growth of the electric vehicle market by launching the 500 kW ultra-fast charger, the UFC 500, allowing us to be compliant with European standards. Additionally, Delta has been actively involved in renewable energy and grid integration, providing 3,500 Delta M125HV solar inverters to MOVE ON Energy GmbH. These inverters have been successfully deployed at Europe’s largest solar power plant, generating sufficient green electricity to power 200,000 households annually, thereby contributing significantly to climate change mitigation.

Mobility

Despite the continued growth of the global electric vehicle market in 2024, the growth rate outside of China has slowed compared to the previous two years. Notably, the regional rollout of electric vehicles charging infrastructure has lagged behind market development, resulting in diversified market demand. Consequently, major automakers are revising their strategies over the next five years, shifting focus from solely battery electric vehicles (BEVs) to a dual approach that incorporates both BEVs and plug-in hybrid electric vehicles (PHEVs). Some automakers are even prioritizing the development of PHEVs to better respond to evolving market dynamics and challenges.

Delta is currently collaborating with several major automakers to develop power systems products for PHEVs, aiming to help them accelerate the release of the vehicles to the market. Concurrently, the integration of electric vehicle drive systems (X-in-1) is emerging as a significant industry trend. Delta has been entrusted by the top three German automakers to develop next-generation integrated systems, some of which have already deployed in vehicles available in the European market. These solutions are expected to be progressively introduced globally over the next few years, becoming a significant revenue source for Delta’s Mobility Business category.

Delta’s long-term strategic core remains committed to offering more innovative solutions and continuously enhancing our brand value. Thanks to our continued investment in R&D and a global business approach, Delta was selected as one of the Best Taiwan Global Brands for the 14th consecutive year. In 2024, the Company’s brand value reached US$ 593 million, marking a 9% increase from the previous year. However, considering the Company’s wide range of products, spanning single components to comprehensive solutions with varying price points, sales volume alone is not the most effective metric for gauging operating performance. Nevertheless, we expect an increase in overall sales volume for the current year compared to the previous year.

We sincerely thank our shareholders, customers, employees, and partners for their long-term trust and support. Looking to the future, Delta remains committed to advancing R&D, fostering innovative thinking, and constantly optimizing and expanding our product portfolio to provide solutions that balance environmental sustainability with performance, making a more profound contribution to global sustainable development.

Finally, wish everyone good health and good luck.