(Bloomberg) – Delta Electronics (Thailand) PCL, the country's most valuable public company, predicts that it will continue to grow in “double digits” sales for at least several years on growing demand for AI-related technologies, Victor Chen said.
Makers of data centers and electric vehicle components are increasing investments to drive expansion, Chen said in an interview. The company also says it plans to raise its sales forecast later this year without disclosing what estimates are.
AI-related products, such as networking and data center power equipment, account for half of Delta Thai's sales by the end of the year, earning the company's forecasts from 42% in the latest quarter. It is one of the Southeast Asian suppliers as its customers, including Nvidia Corp., expand locally and elicits an increasing demand for services such as artificial intelligence.
“All applications involving AI will continue to grow,” Chen said. “This business is not slowing down.”
Among the challenges is the 19% US tariff on Thai exports, but Cheng said he is not too concerned as the company can “communicate all the tariffs quite a bit to its customers.” The US accounts for up to 35% of Thai Delta's sales, he said.
The late performance will benefit from some refunds for the tariffs that Delta Thai had to pay customers in advance at the beginning of the year, the company said. US President Donald Trump recently set the tariff rate in Thailand at 19% after threatening 36% previously.
With Nvidia and its peers releasing new AI hardware on Rapid Clip, Delta Tha and its competitors are under pressure to provide everything for advanced computing equipment, from power supplies to thermal heating solutions. According to Moody's Corporation, data center capacity in the Asia-Pacific region will more than double by 2030, requiring more than $800 billion in investments.
“The momentum is strong,” Chen said. “The data center segment supports both the top line and the bottom line.”
The company's stock has more than doubled from its April low, increasing its market capitalization to around $600 billion, far surpassing its local colleagues. Analysts cite it as one of only a few Thai companies that are well-located to benefit from the data center boom. In November, local stock exchanges introduced trading curbs to the company's stock after a surveillance mechanism after prices skyrocketed.
“I keep saying I don't like stock prices being too high,” Chen said. “If it's very high, I don't know how well it lasts or someone will get hurt.”
The company is expanding its research and development operations in Thailand by hiring more designers and entering new fields such as thermal simulation engineering. This year we are recruiting over 100 engineers, bringing the total to approximately 400 across the country. Overall, Thailand has around 20,000 employees. This is the largest global base.
Two new production facilities at Wellglower Industrial Estate near Bangkok will be online in the fourth quarter. Additional capacity helps meet the demand for power thermal solutions and other components.
“In the coming years, AI and digitalization will be smarter and faster to support our growth,” Chen said. “We just want to maintain this double-digit growth,” and “discipline in managing profit margins.”
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