September 3, 2025 03:22 PM GMT China Industrials | Asia Pacific Automation Operations Tracker – Strong Momentum Sustained Key Takeaways In August, four global players – Yaskawa (6506.T), Panasonic (6752.T), Delta Electronics (2308.TW) and ABB (ABBN.S) – had combined China sales of servos and low-voltage AC drives of +19% and -10%, respectively, according to Market Intelligence Resource (MIR), vs. +3% and -1% y-y in 7M25. Inovance's (300124.SZ) Aug automation orders were up 20-30% y-y vs. +20% y-y in July. V ...

Summary of Delta Electronics Conference Call Company Overview - **Company**: Delta Electronics (2308.TW) - **Market Cap**: NT$1.8 trillion / $60.4 billion [6] - **Industry**: Power supply components, AI server power, EV and server power industry [39] Key Insights Power Consumption and Market Potential - **Rubin GPU Power Consumption**: Expected to increase from 1.4kW to 2.3kW for the B300 chip, surpassing consensus estimates of 1.8kW, driven by demand for high-performance AI computing [1] - **Total Addressable Market (TAM)**: Projected TAM for power supply units (PSU) to rise from US$5.7 billion to US$6.1 billion in 2026E and from US$8.0 billion to US$12.8 billion in 2027E, indicating a ~30% increase in PSU TAM from Q2 2026 [1][31] Revenue and Market Share Projections - **AI Server PSU Market Share**: Expected to maintain high levels of 73% in 2025, 74% in 2026, and 84% in 2027 [3] - **Revenue Contribution**: AI server power revenue projected to account for 31% in 2026E and 47% in 2027E, up from previous estimates of 26% and 33% [3] - **Operating Profit Margin (OPM)**: Anticipated to increase due to higher PSU demand, with AI PSU expected to contribute 52% of total operating profit in 2026E and 61% in 2027E [3] Financial Performance and Estimates - **Earnings Revisions**: 2025/26/27E earnings estimates revised up by <1%/10%/48% due to higher-than-expected power consumption for Rubin and future AI GPUs [33] - **Revenue Growth**: Revenue estimates for 2025E increased by 1% to NT$500.3 billion, for 2026E by 5% to NT$616.6 billion, and for 2027E by 28% to NT$886.5 billion [34] - **EPS Growth**: Expected EPS to rise to NT$20.67 in 2025E, NT$37.26 in 2026E, and NT$70.00 in 2027E, reflecting significant growth [34] Investment Rating and Price Target - **Rating**: Maintain Buy rating with a new target price of NT$670, up from NT$586, based on a target P/E multiple of 25x [4][36] - **Valuation**: The stock is considered undervalued relative to its strong revenue outlook and market leadership [39] Risks and Considerations - **Downside Risks**: Include slower-than-expected growth in AI server power consumption, potential market share loss in AI server DC-DC power systems, and currency fluctuations (NT$ appreciation against USD) [39][40] Additional Insights - **Market Position**: Delta Electronics is the largest vendor of power supply components globally and a key supplier in the EV and server power markets, indicating strong long-term growth potential [39] - **Product Demand**: Increasing demand for AI server power and cooling systems is expected to drive solid growth, necessitating higher power efficiency components [39] This summary encapsulates the critical points from the conference call, highlighting Delta Electronics' strategic positioning, financial outlook, and market dynamics.

Summary of Key Points from the Conference Call Industry Overview - **Event**: Taiwan Tech Tour held on August 19-21, focusing on AI and its impact on the technology sector [1] - **Key Themes**: - AI remains a central topic with discussions on Nvidia's B300 AI server ramp-up expected in Q3/Q4 2025 [1] - Transition to AI platforms and its potential impact in the second half of 2025 [1] - Tight supply of substrate raw materials affecting production [1] - Growth in supply chain content value anticipated from Rubin/Rubin Ultra platforms in 2026/27 [1] - Positive outlook for ASIC development into 2026 [1] - Increased R&D requirements driven by AI, with fewer suppliers expected to outperform [1] - Potential for CoWoP (Chip-on-Wafer-on-Package) technology, though challenges remain [1] Semiconductor and Equipment Insights - **Testing Interface**: Optimism expressed by testing-interface companies regarding AI GPU/accelerators demand due to a new product cycle expected in late 2025 [2] - **Wafer Sorting Complexity**: Increased complexity in wafer sorting and testing noted, with leading foundry suppliers likely to keep advanced packaging in-house [2] - **Inventory Levels**: Non-AI areas reported healthy inventory levels, with clients placing rush orders [2] Substrate and Material Supply - **Substrate Tightness**: General consensus on tightness in substrate raw materials, with larger clients less affected in the near term [3] - **CoWoP Technology**: Seen as a downgraded version of CoWoS, facing significant challenges before it can be scaled effectively [3] Hardware Supply Chain Developments - **Power Supply and Cooling**: Rising content value for power supply and cooling components highlighted, with Delta expecting server power demand to grow 35-40% YoY in 2025 [4] - **Liquid Cooling Trends**: Liquid-to-air cooling remains mainstream due to easier deployment compared to liquid-to-liquid cooling [4] - **HPC/AEC Business Growth**: BizLink anticipates content growth in HPC/AEC business, with upgrades in specifications and increased lengths for interconnects [4] Company-Specific Insights - **Delta Electronics**: - Q3 2025 sales expected to grow QoQ, with AI-related power supply and infrastructure as main drivers [12] - Anticipates liquid cooling to comprise 5-6% of total sales in 2025 [16] - **MPI Corporation**: - Plans to enter 2nm-based projects in 2026, maintaining a dominant market share in ASIC projects [13] - **Vanguard International Semiconductor**: - Expects a flat demand outlook from IT products into 2H25, with a focus on power-related products [13] - **Unimicron**: - Anticipates a significant uptick in AI-related shipments from Q4 2025, with supply constraints easing [13] - **Auras**: - Projects 35-40% YoY sales growth in 2025, with a focus on liquid cooling contributions [16] - **Lotes**: - Maintains a sales growth guidance of 13-17% YoY for 2025, with a focus on the auto business [16] Financial Outlook and Risks - **Delta Electronics Price Objective**: NT$750 based on a P/E of 29x for 2026E, justified by strong market position and growth in AI-related products [27] - **BizLink Price Objective**: NT$820 based on a P/E of 17x, reflecting expanding margins and macro uncertainties [24] - **Auras Price Objective**: NT$825 based on a P/E of 18x, driven by strong demand in the cooling component market [21] - **Risks**: Include potential softer demand in AI servers, macroeconomic uncertainties, and competition pressures [23][26][28] Conclusion The conference highlighted significant growth opportunities in the AI and semiconductor sectors, with companies like Delta, MPI, and Auras positioned to benefit from rising demand and technological advancements. However, challenges such as material supply constraints and competitive pressures remain critical considerations for investors.

Thailand's Delta Electronics is predicting double-digit sales growth to continue for at least the next couple of years on AI demand https://t.co/zFeg2nPwm0 ...

Market Overview - The Data Center Power Management Market was valued at USD 22.0 billion in 2024 and is projected to reach USD 40.1 billion by 2032, with a CAGR of 7.80% from 2025 to 2032 [1][5]. Growth Drivers - The market is experiencing transformative growth driven by increasing global data consumption, energy-efficient infrastructure services, and the expansion of cloud and hyperscale data centers [2]. - Intelligent power solutions that integrate with renewable energy sources to monitor real-time power consumption are preferred by organizations to reduce operational costs and carbon footprints [2]. Regional Insights - In the U.S., the market was valued at USD 5.9 billion in 2024 and is expected to grow to USD 10.6 billion by 2032, reflecting a CAGR of 7.57% [3]. - North America accounted for 35% of global revenue in 2024, supported by advanced digital infrastructure and early adoption of cloud technologies [12]. - The Asia-Pacific region is anticipated to grow the fastest, driven by significant investments in digital infrastructure and government-led renewable energy initiatives [13]. Market Segmentation By Component - The hardware segment held the largest market share at 48% in 2024, driven by essential components like Uninterruptible Power Supply (UPS) systems and Power Distribution Units (PDUs) [6]. - The services segment is expected to register the fastest CAGR during the forecast period due to the increasing complexity of data center environments [7]. By Data Center Type - Hyperscale data centers led the market with a 26% revenue share in 2024, essential for handling large data workloads and supporting cloud services [8]. - Edge data centers are projected to witness the highest CAGR, driven by the demand for low-latency processing and real-time analytics [9]. By Industry - The IT & Telecom sector held the largest share in 2024, fueled by the demand for cloud computing and the expansion of 5G networks [10]. - The retail sector is expected to record the fastest CAGR, driven by the growth of e-commerce and the need for robust IT infrastructure [11]. Key Players - Major players in the market include Schneider Electric, Eaton Corporation, ABB Ltd., Vertiv Holdings Co., Siemens AG, Delta Electronics, Huawei Technologies, Rittal GmbH & Co. KG, Tripp Lite, and Legrand SA [4]. Recent Developments - Schneider Electric launched the Galaxy VXL, a compact UPS for AI workloads, and partnered with NVIDIA for a liquid-cooled AI cluster design [16]. - Vertiv introduced the MegaMod CoolChip, a modular data center solution that reduces deployment time by up to 50% [16].

Summary of Key Points from the Conference Call Industry Overview - The analysis focuses on the **Asia Tech Hardware** sector, particularly the **AI server** and **Apple supply chain** industries, over a 15-year horizon, examining business models, profitability, solvency, and operational efficiency [1] Core Insights Profitability Metrics - **Return on Equity (ROE)** for ODMs and equipment suppliers is projected to be between **20-30%** in 2024, with **Chroma** and **Delta** expected to show significant increases [2] - **Chroma's ROE** has improved from **12% in 2010 to 25% in 2024**, with expectations to reach **31% in 1H25** due to its focus on niche markets and divestment from low-margin segments [15] - **Largan** and **Sunny Optical** have shown fluctuating ROE due to market conditions, with signs of recovery noted since last year [15] Operational Efficiency - **Chroma** has the longest cash conversion cycle at **209 days** due to its industry characteristics, yet maintains a strong free cash flow margin [77] - **Luxshare** has achieved an almost zero cash conversion cycle, indicating high operational efficiency [78] - **Quanta's** cash conversion cycle is longer due to logistical complexities in its supply chain [78] Debt and Solvency - Most companies maintain healthy debt levels, with **Quanta's** net debt-to-equity ratio expected to rise significantly from **15% in 2024 to over 60% in 2025-26** due to AI server business expansion [4][69] - **Largan** has a notably low net debt-to-equity ratio, reflecting its strong cash position [69] Capital Expenditure and Free Cash Flow - **Unimicron** is identified as the most capex-intensive company with a capex-to-revenue ratio averaging **21%** over the past five years [5] - **Chroma** and **Largan** exhibit free cash flow margins between **20-40%**, indicating strong cash generation capabilities [5] Investment Ratings and Price Targets - **Delta Electronics**: Rated Outperform, Price Target (PT) of **NT$630** [8] - **Chroma ATE**: Rated Outperform, PT of **NT$570** [9] - **Quanta Computer**: Rated Underperform, PT of **NT$240** [10] - **Unimicron Technology**: Rated Outperform, PT of **NT$170** [11] - **Luxshare Precision**: Rated Outperform, PT of **RMB47** [12] - **Sunny Optical**: Rated Outperform, PT of **HK$97** [13] - **Largan Precision**: Rated Market-Perform, PT of **NT$2,400** [14] Additional Observations - The **camera and PCB sectors** show that CIS and lens suppliers achieve higher ROIC compared to module players, with higher technological barriers enhancing supplier concentration [3] - **Quanta's** financial performance is heavily reliant on the PC market, which has seen fluctuations impacting its ROE [15] - The **PCB market** is characterized by cyclical demand, with companies needing substantial capital investments to expand capacities [54] This comprehensive analysis highlights the competitive landscape and financial health of key players in the Asia Tech Hardware sector, providing insights into potential investment opportunities and risks.

Group 1 - The article provides a summary of the market capitalization changes of major global technology and internet companies as of July 21, 2025, highlighting both increases and decreases in their valuations [1][3][4]. - Tesla's market cap increased by 3.21% to $1,061.7 billion, while Netflix saw a significant decrease of 5.1%, bringing its market cap down to $514.6 billion [3][4]. - Alibaba's market cap rose by 12.5% to $286.8 billion, indicating a strong performance compared to other companies in the sector [3][4]. Group 2 - Companies like Qualcomm and Adobe experienced slight increases in their market caps, with Qualcomm up by 1.44% to $166.0 billion and Adobe down by 0.18% to $122.1 billion [4][5]. - Notable performers included MercadoLibre, which increased by 2.66% to $1,223.0 billion, and Robinhood, which rose by 4.07% to $668.0 billion [5][6]. - Companies such as Intel and Sea Limited also showed positive growth, with Intel up by 1.32% to $1,007.0 billion and Sea Limited increasing by 0.88% to $997.0 billion [5][6].

Summary of Global Tech Conference Call Industry Overview - The report focuses on the **Global Server Cooling** market, particularly the adoption of **liquid cooling** technologies in AI servers and ASIC servers [1][21][28]. Key Points Market Growth and Projections - The **Total Addressable Market (TAM)** for liquid cooling in AI training servers is projected to grow to **US$3.8 billion** in 2025 and **US$7.9 billion** in 2026, representing a **171%** and **106%** year-over-year growth respectively [1][15]. - The overall **Global Server Cooling TAM** is revised to **US$7.2 billion** in 2025 and **US$12.0 billion** in 2026, reflecting a **98%** and **66%** year-over-year growth [21][29]. Liquid Cooling Adoption Rates - Liquid cooling penetration for AI training servers is expected to rise from **15%** in 2024 to **45%** in 2025 and **74%** in 2026 [1][22]. - Full rack AI training servers will have a **100%** liquid cooling penetration rate, while baseboard-based AI training servers will see penetration rates of **27%** in 2025 and **52%** in 2026 [4][22]. Segment Analysis - For **general/HPC/AI inferencing servers**, liquid cooling penetration is anticipated to increase from **1%** in 2024 to **4%** in 2025 and **6%** in 2026 [23]. - The report indicates a potential upside from **ASIC servers**, with liquid cooling adoption driven by advancements in ASIC chips and improved ROI [28]. Component Breakdown - The TAM for liquid cooling components is detailed as follows: - **Cold plates**: US$1.1 billion in 2025, growing to US$2.2 billion in 2026 - **Manifold**: US$897 million in 2025, increasing to US$1.6 billion in 2026 - **Rear Door Heat Exchanger (RDHx)**: US$214 million in 2025, rising to US$283 million in 2026 - **Sidecar**: US$1.3 billion in 2025, reaching US$2.4 billion in 2026 - **CDU/RPU**: US$779 million in 2025, escalating to US$2.2 billion in 2026 [13][29]. Competitive Landscape - Key suppliers in the liquid cooling market include: - **Hon Hai**: Buy rating, market cap of US$77.1 billion - **Quanta**: Neutral rating, market cap of US$35.6 billion - **Wiwynn**: Buy rating, market cap of US$15.9 billion - **Lenovo**: Buy rating, market cap of US$15.9 billion - **Dell**: Buy rating, market cap of US$85.3 billion [32]. Additional Insights - The report highlights the importance of **liquid cooling** in meeting the increasing power demands of AI servers, particularly as computing power continues to rise [1][10]. - The adoption of liquid cooling technologies is expected to be a significant driver for the growth of the server cooling market, with major tech companies like Amazon, Microsoft, and Google investing in these solutions [28]. This summary encapsulates the critical insights from the conference call regarding the trends, projections, and competitive landscape of the global server cooling market, particularly focusing on liquid cooling technologies.

Core Insights - The partnership between Microchip Technology and Delta Electronics aims to enhance the development of sustainable applications through the use of Microchip's mSiC™ technology and Delta's energy-saving solutions [1][2] Group 1: Partnership Details - The collaboration focuses on utilizing Microchip's mSiC™ products in Delta's designs to create innovative SiC solutions and energy-saving products [1] - The agreement allows for top-tier design support, including technical training, insights into R&D activities, and early access to product samples [3] Group 2: Technology and Market Impact - SiC technology is crucial for sustainable power solutions due to its wide-bandgap properties, which facilitate smaller and more efficient designs for high-voltage applications at lower system costs [2] - Delta Electronics aims to leverage Microchip's expertise in SiC and digital control to accelerate the market introduction of solutions for high-growth sectors such as AI, mobility, automation, and infrastructure [2] Group 3: Company Background - Microchip Technology has over 20 years of experience in developing SiC devices and power solutions, offering a range of mSiC products including MOSFETs, diodes, and gate drivers [4] - Microchip serves over 100,000 customers across various markets, including industrial, automotive, consumer, aerospace, and defense [6]

Core Insights - Broadcom has launched the Tomahawk Ultra Ethernet switch, designed to enhance performance for high-performance computing (HPC) and AI workloads with ultra-low latency and lossless networking capabilities [1][2][3] Product Features - Tomahawk Ultra achieves sub-400ns XPU-to-XPU communication latency, setting a new benchmark for synchronized AI compute at scale [5] - The switch reduces Ethernet header overhead from 46 bytes to 10 bytes, significantly improving network efficiency while maintaining compliance [6] - It incorporates lossless fabric technology, utilizing Link Layer Retry (LLR) and Credit-Based Flow Control (CBFC) to prevent packet loss during high-volume data transfers [7][8] - The switch supports In-Network Collectives, executing collective operations directly within the switch chip, which reduces job completion time and enhances resource utilization [8] Market Positioning - The Tomahawk Ultra is positioned as a solution for the convergence of AI and HPC workloads, meeting the demands for supercomputer-class latency and reliability [3][4] - It is designed to be endpoint-agnostic, facilitating immediate adoption across various system architectures and vendor ecosystems [9] Strategic Developments - Broadcom has introduced SUE-Lite, an optimized version of the Scale-Up Ethernet specification, tailored for power-sensitive applications while retaining low-latency and lossless characteristics [10][11] - The Tomahawk Ultra, along with the Tomahawk 6, forms a unified Ethernet architecture that supports both scale-up for AI and scale-out for HPC [12] Industry Impact - The launch of Tomahawk Ultra is seen as a significant advancement in Ethernet innovation, particularly for AI and HPC environments, with industry leaders expressing excitement about its potential to accelerate job completion times and enhance performance [19][20][21][22][23][24][25][26][27][28][29]