Thailand's Delta Electronics predicts "double-digit" sales growth fueled by AI demand

Delta Electronics (Thailand) Pcl predicts double-digit sales growth for the next couple of years due to rising demand for AI-related tech. The company plans to boost investment and raise its sales forecast for the second half of this year. AI-related products are expected to account for half of Delta Thailand's sales by the end of the year. The US tariff of 19% on Thai exports is a challenge, but the company can pass on the costs to customers.

Delta Electronics (Thailand) Plc is forecasting "double-digit" sales growth for the next couple of years, driven by surging demand for artificial intelligence (AI)-related technology. The company, listed on the Stock Exchange of Thailand (SET), expects AI-related products to account for half of its sales by the end of 2025, up from 42% in the latest quarter [1].

The SET-listed manufacturer of components for data centers and electric vehicles plans to boost investment to fuel its expansion and raise its sales forecast for the second half of 2025. The company is also expanding its research and development (R&D) operations in Thailand, hiring more designers and entering new areas such as thermal simulation engineering [1].

The growth is expected to be propelled by the increasing demand for AI services, particularly generative AI, and the rapid release of new AI hardware by companies like Nvidia. Data center capacity in the Asia-Pacific region is projected to more than double by 2030, requiring substantial investment [2].

However, the company faces challenges, including a 19% US tariff on Thai exports. Despite this, Delta Thailand can pass on the costs to customers and expects a refund of some tariffs paid upfront earlier in the year [1].

Delta shares have more than doubled from an April low, bringing its market capitalization to 1.9 trillion baht. The company's strong performance has led to trading curbs on its shares by the SET, triggered by its surging price [1].

Delta Thailand's CEO, Victor Cheng, remains cautious about the stock price, expressing concern that it could be too high to sustain. He emphasizes the company's focus on maintaining double-digit growth and disciplined profit margin management [1].

References:
[1] https://www.bangkokpost.com/business/general/3086676/delta-electronics-says-ai-will-fuel-double-digit-growth
[2] https://www.businesstimes.com.sg/international/asean/thailands-delta-sees-ai-boom-boosting-sales-coming-years