【Delta Investor Briefing AI Summary】August 4, 2026

I. Delta Electronics (8163-TW) Q2 2026 Financial and Operational Details

Financial Performance:

• Revenue and Profit: Consolidated revenue for Q2 2026 reached NT$7.517 billion, up 24.8% QoQ and 8.9% YoY. Gross profit was NT$1.246 billion (up 15.1% QoQ, 12.1% YoY), with gross margin slightly down to 16.6%. Operating profit rebounded to NT$418 million, with an operating margin of approximately 5.5%. Net profit attributable to parent company shareholders was NT$860 million (up 51.6% QoQ, 47% YoY), resulting in basic EPS of NT$0.31 per share.

• First Half Accumulation: For the first half of 2026, consolidated revenue totaled NT$13.542 billion, up 9.32% YoY; gross margin averaged around 17.2% (up 11.5% YoY); operating profit was NT$227 million (up 42.8% YoY); net profit attributable to parent company was NT$143 million (up 19% YoY), with H1 EPS at NT$0.51.

• Assets and Cash Flow: As of the end of Q2, cash and cash equivalents approached NT$6.08 billion, total assets stood at NT$34.5 billion, and net asset value per share was NT$38.4. Capital expenditures in the first half amounted to approximately NT$500 million (70% allocated to automation equipment and production molds, 30% to expansion of the new Vietnam plant), with about NT$380 million spent on the acquisition of High-Tide.

Revenue Structure by Three Business Groups:

• Green Energy Products: Revenue contribution rose to 45% in Q2 (average of 42% for H1), primarily driven by a significant recovery in European green energy distribution channels and growth in E-bike demand.

• IT Peripherals: Q2 revenue share declined to 43% (H1 average of 46%), with revenue showing sequential growth but at a slower pace than the green energy segment.

• Integrated Components: Revenue share remained around 12% for both Q2 and H1, maintaining double-digit quarterly growth.

Market Outlook and Operational Strategy:

• Second-Half Revenue Outlook: The company remains optimistic about overall operations for the second half, with unchanged full-year revenue targets. The revenue mix between green energy and non-green energy (IT Peripherals + Integrated Components + AIoT) is expected to remain around 42:58.

• Passive Component (MLCC) Supply and Demand: Due to Japanese and Korean manufacturers shifting capacity toward high-end AI server demands, certain high-end MLCC products are experiencing shortages and extended lead times. The company's current capacity utilization is extremely high. New equipment ordered last year has been gradually deployed since August–September this year to increase production of high-voltage, high-capacity, and specialty-spec MLCCs, with ongoing price increases.

• Green Energy Inventory Clearance and Transformation: E-bike inventory disposal is expected to conclude by the end of this year, restoring healthy inventory levels for next year. Meanwhile, battery products are progressively expanding from light mobility/E-bikes to industrial applications, robotics, and drones. Long-term goals also include planning entry into BBU (backup battery units) for data centers.

• Acquisition Strategy and AIoT Transformation: The acquisitions of High-Tide (power supplies) and Quanjing (thermal solutions), combined with Delta’s own battery technology, establish a 'thermal + power + battery' triad strategy, targeting demand from AI data centers and server edge applications.

[Complete Q&A from Delta's Investor Briefing]

Q1: What is the capacity utilization rate for passive components (MLCC)? Are there expansion plans?

Answer: Capacity utilization for passive components is currently very high, in a state of undersupply. Previous capacity was approximately 5 to 10 billion units (depending on specifications). New equipment purchased last year has been deployed for the current year's second-half production expansion. Whether further large-scale expansion will occur depends on market conditions extending into next year.

Q2: What are the specific details of the 70% automation and 30% Vietnam expansion within capital expenditure (CapEx)?

Answer: The 70% production equipment investment includes automation construction for IT peripherals at the new Vietnam plant, MLCC production equipment, and investments in battery-related equipment. The 30% facility CapEx mainly refers to the new factory under construction by subsidiary Taitronics in southern Vietnam.

Q3: Is the green energy product line shifting toward BBU beyond E-bikes? What are future product enhancement plans?

Answer: BBU for data centers and servers requires extremely high safety standards and durability (e.g., 800V high voltage), necessitating long-term validation. In the next 1–2 years, the company will prioritize increasing the proportion of non-E-bike mobility applications (including industrial use, robotics, and drones). Long-term, large-format batteries such as BBU are considered one of the development goals.

Q4: What is the progress on green energy (E-bike) inventory clearance and order visibility?

Answer: The company continues to clear inventory, aiming to complete the overall mobility (including finished vehicles and raw materials) inventory adjustment by year-end, restoring healthy conditions for next year. In terms of market competition, the sub-$1,000 low-end segment is highly competitive, while demand remains in the high-end segment. Delta’s manufacturing (Taiyu, Yongjie) and battery businesses are accelerating transformation and adjusting product strategies.

Q5: What is the company's gross margin outlook for the second half?

Answer: Gross margin in the first half ranged between 16–17% (16.6% in Q2), primarily due to incomplete pass-through of rising material costs. In the second half, the company aims to maintain gross margins above 18% and continue progressing toward a 20% target through site consolidation, timely cost reflection to customers, and improved mix from high-margin peripherals and green energy inventory recovery.

Q6: What are the strategic rationale and benefits of the February acquisition of High-Tide and Quanjing?

Answer: These two companies specialize in power and thermal solutions respectively. Combined with Delta’s existing battery products, they form the three core elements—'thermal + power + battery'—for AI data centers and servers. The company is currently entering from the edge and low-end customer segments, helping Delta’s peripheral and component businesses expand and transform into AIoT and AI application areas.

Q7: What are the pricing trends and changes for specialty-spec MLCCs?

Answer: Due to Japanese manufacturers shifting capacity to data center applications, lead times for high-end, high-capacity products have lengthened and supply-demand imbalance persists. Delta’s new equipment, deployed in August and September, will increase high-voltage, high-capacity production capacity. Price increases are ongoing and expected to continue in the second half.