Delta Electronics to invest US$1 billion in manufacturing and R&D

Delta Electronics (Thailand), the nation’s premier electronics firm by market capitalisation, is primed to inject between US$500 million and US$1 billion in a bid to enhance its manufacturing and research and development (R&D) capabilities over the next five years. A significant portion of this investment is earmarked for Thailand, disclosed CEO Victor Cheng.

Cheng revealed that the capital expenditure surpassing US$500 million would be dispersed between Thailand, India, and Germany. Thailand and Krishnagiri, a city in India’s Tamil Nadu state, are marked for new manufacturing sites, while an existing R&D centre in Soest, Germany, is set for expansion within a three to five-year timeline.

Currently, Delta operates six manufacturing facilities situated in Thailand’s Wellgrow and Bangpoo industrial estates, with plans to open two additional sites by 2026. Cheng stated that in 2022 and 2023, the company’s capital expenditure reached nearly US$200 million and US$345 million respectively, and worldwide, Delta employs a workforce of 21,000.

Products linked to electric vehicles (EVs), power supply, and business-related engineered solutions and systems will be the primary focus of the investment, according to Cheng, who assumed Delta Electronics (Thailand) leadership on January 1, 2024.

Drawing attention to the relatively sluggish start to the year for the overall electronics sector on the Stock Exchange of Thailand, due to unpredictable market conditions, Cheng maintained that Delta remains a robust investment choice.

“Our proven track record of business profitability and financial resilience positions us well to navigate market volatility.”

Cheng further highlighted the potential growth sectors within the electronics industry, stating that Delta is strategically positioned to capitalise on the trend towards e-mobility.

For the current year, Delta projects a 15-20% growth in total revenue compared to 2023, when the company recorded an unprecedented turnover of US$4.1 billion.

Financial performance

Despite softer growth momentum in the final quarter due to cautious EV power business demand and looming global recession concerns, Cheng reported a 23% revenue increase last year.

“Net profit also reached an all-time high of US$524 million, up 21% over 2023, driven by the revenue uptrend, operational excellence in managing expenses, and record non-operating gains.”

Cheng expressed confidence in the steady demand for essential infrastructure, asserting that the company’s operations in data centres, telecom power, and EV sectors are favourably positioned. He also identified growth opportunities in Southeast Asia and Australia for Delta’s energy infrastructure and industrial automation solutions businesses, reported Bangkok Post.

“We anticipate an acceleration in growth for several major economies compared to 2023. There are signs of improved business sentiment, rising consumer spending, increased trade and investment activity, accommodative monetary policies, and fiscal stimulus packages supporting economic recovery.”