Delta Electronics 3Q26 Preview: The Street's Full-Year Number Needs Fourth-Quarter Revenue Up 20%
The street's FY26E revenue of NT$776.4bn, less the NT$539.7bn filed for January to September, leaves NT$236.7bn for the fourth quarter, up 20% QoQ and 46% YoY. Delta gives no numerical guidance, so the test on 29 October is what management says about component supply, which brokers expect to normalise only in November, the ramp of 12kW and 18kW power supplies and the 5-10% price increases they expect.
Monthly filings put July at NT$67.1bn, August at NT$64.6bn and September at NT$65.4bn, a quarter up 7.5% QoQ and 31.1% YoY against the NT$208.3bn Morgan Stanley cited as consensus before the September print. Brokers attribute the gap to shortages of power management chips and MOSFETs and to the validation of 18kW power supplies, so the release can only surprise below the revenue line.
Gross margin was 35.6% in 2Q26 and operating margin 16.7%, and in July management framed second-half gross margin near 35% while shortening the depreciation life of AI equipment from five years to three. We expect 34.5-35.5%, operating profit of NT$31.5-33.0bn and EPS of NT$9.0-10.0 against NT$9.68 in 2Q26.
Mass production of the 400V and 800V high-voltage DC power products began in the third quarter, with limited fourth-quarter volumes and the ramp set for 2027 on the customers' platform timing. The US International Trade Commission opened a Section 337 investigation on 9 October into Vicor's vertical power delivery patents, naming Delta, Hon Hai and Quanta among the respondents; Delta says its products are not affected.
The shares fell 3.3% on 12 October and 6.6% on 13 October after the patent case was reported, then 8.7% on 15 October when the Taiex fell 3.4% on record foreign selling, and now sit 2% above their close on the day of the July results meeting. The multiple has come down from about 60x the street's FY26E earnings at the May high to 38.7x.
Company snapshot
Delta Electronics (2308 TT) is the world's largest maker of switching power supplies and a leading supplier of data-center power systems, thermal management and liquid cooling. From its Taipei base it runs four businesses: power electronics, infrastructure for data centers and energy systems, industrial automation and e-mobility. In September 2026 power and components were 51% of revenue, infrastructure 35%, automation 8% and mobility 6%. Management expects AI-related products to exceed 25% of revenue in 2026, from 18% in 2025, and liquid cooling to exceed 12%. Delta manufactures in Taiwan, China, Thailand, India and the United States; its Bangkok-listed subsidiary Delta Electronics (Thailand) carries much of the data-center output.
Expectations snapshot
Delta releases 3Q26 results and hosts its analyst meeting on 29 October at 15:00 Taipei time (TWSE filing, 15 October). The company does not give numerical guidance, so the table carries what is already filed, the qualitative frame management set at the July meeting, and the street's full-year numbers.
| Metric | 3Q26 | FY26E | FY27E |
|---|---|---|---|
| Revenue | Filed NT$197.1bn (+7.5% QoQ, +31.1% YoY); street before the print NT$208.3bn | Not guided; street NT$776.4bn (+40%); Zero One NT$760-770bn (4Q26E NT$220-230bn) | Not guided; street NT$1,099.2bn (+42%); Zero One NT$1,099.2bn |
| Gross margin | Not guided; management frames 2H26 near 35% (2Q26: 35.6%); our expectation 34.5-35.5% | Not guided (FY25: 34.3%) | Not guided |
| Operating margin | Not guided (2Q26: 16.7%); our expectation 16.0-16.8% | Not guided (FY25: 15.1%) | Not guided |
| Net profit | Not guided (2Q26: NT$25.1bn, EPS NT$9.68); our expectation NT$23.5-26.0bn, EPS NT$9.0-10.0 | Not guided; street NT$117.6bn (+96%), which needs NT$46-48bn in 4Q26E on our 3Q26 range | Not guided; street NT$167.4bn (+42%) |
| Capital spending | Not disclosed quarterly | Guided about NT$70bn (1H26 NT$27.5bn; FY25 NT$46.6bn) | Not guided |
| Reported to date | All three months filed (NT$197.1bn) | Jan-Sep NT$539.7bn, 70% of the street figure; 1H26 EPS NT$17.59 | n/a |
Recent developments
- The meeting is set for 29 October, two days after Delta Thailand reports. Delta's exchange filing of 15 October set the 3Q26 analyst meeting for 29 October at 15:00 at its Taipei headquarters (TWSE filing; Delta IR calendar). Delta Electronics (Thailand), the Bangkok-listed subsidiary, is scheduled to release its own third quarter on 27 October (Investing.com calendar), which gives an early read on the group's data-center power business.
- September sales of NT$65.4bn closed a record quarter with the slowest growth of the year. September revenue rose 1.3% MoM and 14.6% YoY against a September 2025 that had risen 54% on the first AI-demand disclosure note; the quarter's NT$197.1bn was up 7.5% QoQ and 31.1% YoY, and January to September revenue of NT$539.7bn was up 37.2% (company monthly sales release, 12 October; MOPS filings).
- Brokers trace the third-quarter gap to component shortages and expect a double-digit fourth quarter. A local brokerage cut its 3Q26 revenue estimate to NT$209.3bn on 1 October, citing shortages of power management chips and MOSFETs and validation problems with 18kW power supplies, with supply normalising only in November, and projected 4Q26 revenue of NT$251.1bn on 12kW and 18kW power supply shipments, first HVDC volumes and price increases of 5-10% to pass on component costs (Wantrich, 1 October). After the September print Morgan Stanley put consensus for the quarter at NT$208.3bn, attributed the shortfall to component shortages and customer pull-in schedules, and expects double-digit QoQ growth in the fourth quarter (ETtoday, 13 October). Delta told the exchange in September that reports of double-digit fourth-quarter growth were analysts' own estimates and that it gives no financial forecasts (MOPS filing, 21 September).
- The US International Trade Commission opened a Section 337 case naming Delta. On 9 October the USITC instituted investigation 337-TA-1526 on a complaint by Vicor alleging infringement of its vertical power delivery patents, with Delta, Hon Hai, Quanta and Luxshare among the respondents. Delta said it will respond through the legal process and that the products concerned are not currently affected; Taiwan's trade agency noted such cases typically run 12 to 16 months (CNA and Storm Media, 11 October).
- Delta showed its 800 VDC and 400 VDC power portfolio at the OCP Global Summit. At the summit in San Jose on 12-15 October Delta presented AC/DC and DC/DC power shelves, 800 VDC and 400 VDC power delivery solutions and high-current busbars (company release, 8 October), following the 660kW 800V power rack shown at NVIDIA GTC in March. On 14 October it launched a solid-state-transformer-based DC power system at Energy Taiwan (company release, 14 October).
- The shares gave back the October rally in two weeks. From a close of NT$2,050 on 6 October the shares fell to NT$1,560 on 22 October, down 24%, with falls of 3.3% on 12 October and 6.6% on 13 October after the patent case was reported, 8.7% on 15 October as the Taiex fell 3.4% on record foreign net selling, and 4.0% on 22 October. The shares are 38% below their 27 May closing high of NT$2,520, 2% above the NT$1,530 close on the day of the July results meeting, and 54% above a year earlier (Taiwan Stock Exchange closing prices; Business Today, 16 October).
Third-quarter revenue is filed at a record NT$197.1bn, and the street's year needs NT$236.7bn in the fourth
All three months of the quarter are filed, so the revenue line is settled before the release. The quarter's NT$197.1bn is a record, but the year-on-year growth rate of 31.1% is the slowest since 2Q25, after 47.7% in 2Q26, and September's 14.6% was the slowest monthly growth since November 2024, against a September 2025 base that first carried the AI-demand disclosure note.
| Month | 2025 (NT$bn) | 2026 (NT$bn) | YoY | MoM 2026 |
|---|---|---|---|---|
| July | 45.40 | 67.07 | +47.7% | +2.2% |
| August | 47.86 | 64.59 | +34.9% | -3.7% |
| September | 57.06 | 65.40 | +14.6% | +1.3% |
| Third quarter | 150.32 | 197.06 | +31.1% | +7.5% QoQ |
| January to September | 393.27 | 539.67 | +37.2% |
- July revenue of NT$67.1bn was the company's highest month on record; August fell 3.7% MoM to NT$64.6bn and September rose 1.3% to NT$65.4bn, so the quarter ran flat month to month after July rather than building into September as it did in 2025.
- January to September revenue of NT$539.7bn covers 70% of the street's FY26E figure of NT$776.4bn. The implied fourth quarter of NT$236.7bn is up 20% QoQ and 46% YoY; the implied second half of NT$433.8bn is 27% above the first half, in line with the 28% half-on-half step Delta delivered in 2025.
- The street's FY26E net profit of NT$117.6bn, less the NT$45.7bn reported in the first half, leaves NT$71.9bn for the second half, or NT$36.0bn a quarter against NT$25.1bn in 2Q26. On our 3Q26 expectation of NT$23.5-26.0bn the fourth quarter would need NT$46-48bn, nearly twice the second quarter.
The fourth-quarter revenue the street needs is close to what the local brokerage projects at NT$251.1bn, and both rest on components arriving in November, the 12kW and 18kW power supplies ramping for the new GPU platforms and price increases taking effect. If management describes the supply recovery as complete by November, the street's number stands; if the recovery slips into December, the fourth quarter grows by double digits but short of 20%.
Management framed second-half gross margin near 35% and 2026 capex at about NT$70bn
Management's July frame was qualitative. Chairman Ping Cheng said the second half would be better than the first, that gross margin near 35% is a reasonable level for the company after the 37.0% of 1Q26 carried a one-time order-cancellation gain, and that the third quarter is seasonally the stronger margin quarter. Capital spending for 2026 was set at about NT$70bn against NT$46.6bn in 2025, with NT$27.5bn spent in the first half and more than NT$40bn due in the second as factory milestones and equipment payments fall; from April the depreciation life of AI equipment was cut from five years to three (July analyst meeting coverage, 30 July).
On products, management said mass production of the 400V and 800V HVDC lines would start in the third quarter with limited shipments in the fourth and the volume ramp in 2027, that 400V is ahead because it started earlier, and that 800V volumes depend on the cloud providers' adoption of NVIDIA's platform. AI-related products were put at more than 25% of 2026 revenue and liquid cooling at more than 12%. Mobility posted an operating loss of NT$0.4bn in 2Q26 on weak EV demand and automation a loss of NT$0.4bn on shortages and higher material costs; management said automation should not lose money in the second half.
The street expects FY26E revenue of NT$776.4bn, up 40%, and net profit of NT$117.6bn, up 96%, then FY27E revenue of NT$1,099.2bn, up 42%, with net profit of NT$167.4bn (FMP consensus, 21 analysts, refreshed 14 October). The FY27E numbers rest on the HVDC ramp and the 18kW power supplies that management has said carry higher margins, so the release's commentary on 2027 demand from the cloud providers matters more to the shares than the third-quarter margin.
Our forecast for FY26E revenue is NT$760-770bn, 1-2% below the street's NT$776.4bn. The difference sits in the fourth quarter: with supply normalising only in November and the first HVDC volumes limited, we expect 4Q26E revenue of NT$220-230bn, up 12-17% QoQ, against the NT$236.7bn the street's year needs. For FY27E we carry the street's NT$1,099.2bn. The two FY26E numbers converge if management confirms that the components held back in the third quarter are shipping in the fourth.
What to expect from the release
- Gross margin of 34.5-35.5% and operating margin of 16.0-16.8%. Management framed 35% as the reasonable level and the third quarter as seasonally stronger, but the cost of components in short supply passes through to customers with a lag, the shorter depreciation life on AI equipment adds to cost of sales, and the mix of the quarter leaned on power supplies rather than the higher-margin liquid cooling that lifted 1Q26.
- Operating profit of NT$31.5-33.0bn and net profit of NT$23.5-26.0bn, for EPS of NT$9.0-10.0. That is operating profit up 3-8% QoQ on revenue up 7.5%, with net profit flat to up modestly against NT$25.1bn in 2Q26, a quarter that carried NT$4.4bn of non-operating income including valuation gains. A print above NT$10 would mean margins held at the 2Q26 level with no drag from the shortages.
- A fourth quarter described as growing by double digits, with supply normal by November. We expect management to confirm that the components held back in the third quarter ship in the fourth and that the 12kW and 18kW power supplies are ramping, without putting a number on the quarter. A statement that supply is already normal would support the street's NT$236.7bn; a recovery dated to December would not.
- First HVDC shipments confirmed, 2027 volumes left to the customers. The 400V systems should be shipping in small volumes and the 800V rack on NVIDIA's schedule; we expect no change to the 2027 ramp and a statement that the Vicor case does not touch the products now shipping.
- Capital spending held at about NT$70bn and a first view on 2027. Management said in July that capex would stay at NT$70bn or higher if growth holds; with the Thailand plants due to complete across 2026-2027 and a US building purchased, we expect the figure to be confirmed and 2027 framed as flat to higher.
What investors should watch: three issues for the fourth quarter and 2027
The revenue line is filed and the street's year now depends on the fourth quarter. Three issues at the meeting decide the fourth-quarter and 2027 numbers; for each we give our expectation and the specific thing to check, with capital spending as a fourth item.
- Does the fourth-quarter outlook support NT$236.7bn? The street's year needs revenue up 20% QoQ; we expect NT$220-230bn. Check the date management gives for component supply returning to normal against the November that brokers expect, the status of the 18kW power supply validation, the size and timing of price increases against the 5-10% brokers project, and whether October revenue, due on 10 November, is described as above September's NT$65.4bn.
- Did gross margin hold near 35%, and what did the depreciation change cost? Check gross margin against 35.6% in 2Q26 and operating margin against 16.7%, the quarter's non-operating income against the NT$4.4bn of 2Q26, the operating result in mobility and automation after their NT$0.4bn losses, and management's margin frame for the fourth quarter when the 18kW units and HVDC racks, which brokers put at up to 50% gross margin, start to ship.
- HVDC volumes, the 800V timetable and the Vicor case. Check the 400V shipment volume in the fourth quarter, whether the 800V ramp is still 2027 and tied to the next NVIDIA platform, the share of 2027 revenue management will attach to HVDC against the 5-10% a local analyst estimated in September, and whether any product named in USITC investigation 337-TA-1526 is one Delta ships today.
- Capital spending against NT$70bn and the 2027 direction. Check second-half spending against the more than NT$40bn planned, the completion dates of the three Thailand plants, and whether management frames 2027 capex as flat, higher or lower; a cut would be the first sign of demand slowing, which management said in July it had not seen.
Valuation and peer comparables
At NT$1,560 Delta trades at 38.7x FMP's FY26E EPS consensus and at 34x the street's FY26E net profit of NT$117.6bn divided by 2,597m shares; the two consensus sets differ in analyst coverage. On the street's FY27E net profit of NT$167.4bn, NT$64.5 a share, the multiple is 24x. Forward EV/EBITDA is 19.8x (Exhibit 6).
Against the data-center power peers the shares carry a premium on earnings and sit in line on sales. Vertiv trades at 29.1x forward earnings and Eaton at 27.1x, against Delta's 38.7x, while on forward EV/Sales Delta's 5.1x is level with Vertiv's 5.4x and Eaton's 5.0x. Lite-On, the nearest Taiwan power supply peer, trades at 24.0x. The three-peer median of 27.1x is a fair denominator, with no depressed-earnings names in it, so the premium rests on the street's growth path: revenue up 40% in FY26E and 42% in FY27E, net profit up 96% and then 42%.
Against its own history the multiple has fallen with the estimates still rising. At the 27 May closing high of NT$2,520 the shares traded at about 60x the street's FY26E earnings of the time; the estimate has since risen and the price has fallen 38%. The fourth-quarter outlook on 29 October is the nearest item that can move the FY27E number: a description of supply recovered and HVDC shipping supports the 24x FY27E multiple, while a recovery that slips into December would take the FY26E number down by the 1-2% our range implies and raise the question of whether FY27E's 42% growth starts from a lower base.
| Company | Mkt cap (US$bn) | P/E (TTM) | P/E (Fwd) | EV/Sales (TTM) | EV/Sales (Fwd) | EV/EBITDA (TTM) | EV/EBITDA (Fwd) |
|---|---|---|---|---|---|---|---|
| US-Listed | |||||||
| Eaton | 143.3 | 37.4x | 27.1x | 5.5x | 5.0x | 25.4x | 21.4x |
| Vertiv Holdings | 75.3 | 43.3x | 29.1x | 6.6x | 5.4x | 29.7x | 17.8x |
| Taiwan-Listed | |||||||
| Lite-On Technology | 17.8 | 29.9x | 24.0x | 2.9x | 2.5x | 20.1x | 14.4x |
| Peer median (all peers) | 37.4x | 27.1x | 5.5x | 5.0x | 25.4x | 17.8x | |
| Delta Electronics | 124.3 | 49.6x | 38.7x | 6.0x | 5.1x | 27.1x | 19.8x |
Source: FMP market data and consensus estimates, Zero One Investment Research. Prices as of 22 October 2026 (Taipei close) and 22 October 2026 (US close). Forward multiples use each company's fiscal year to December 2026 per FMP consensus. Delta Electronics market cap is NT$4,052bn at NT$1,560 and 2,597m shares, converted at the FMP rate. Chicony Power Technology is in the peer set but carries no vendor estimates and is omitted. P/B is not shown for this capital-intensive group.