Delta Electronics (2308.TW): AI revenue continues in the upward trend

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Delta Electronics (2308.TW): AI revenue continues in the upward trend

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30 Jul 2026 11:22:38 ET │ 16 pages

Delta Electronics (2308.TW)

AI revenue continues in the upward trend

CITI'S TAKE

Delta hosted analyst meeting today. Despite 2Q26 GM/OPM below market

expectations, the company remains constructive on AI infrastructure

deployment. 2Q GM decline is mainly due to normalizing after one-off Buy

benefits in 1Q26; management believes ~35% GM is sustainable. Near-term Price (30 Jul 26 13:30) NT$1,530.00

risks are more related to component shortages, construction delays and

Target price NT$2,280.00product transitions rather than demand deterioration. Importantly, Delta

continues to expand capacity globally, raises AI-related capex and invests Expected share price

49.0%more in RD, positioning itself to capture future AI power and infrastructure return

opportunities. Note that AI related revenue would contribute 25% for this Expected dividend yield 1.3%year. We maintain Buy on the constructive outlook.

Expected total return 50.3%

HVDC progresses gradually while Delta maintains technology leadership — Market Cap NT$3,974,241M

Management reiterated that the transition toward HVDC remains on track but will US$122,813M

be more gradual. Production of ±400V solutions will begin in 3Q26 and will be the

mainstream architecture during the initial transition period. 800V adoption will

ultimately depend on hyperscaler deployment decisions. Despite increasing

competition from Chinese and international power suppliers, Delta believes its early

Price Performancecustomer engagement, engineering scale and ability to rapidly respond to evolving

AI system architectures provide sustainable competitive advantages. Management (RIC: 2308.TW, BB: 2308 TT)