Delta Electronics (台達電子) is a Taiwanese company in  the power management and energy efficiency space.

With $14 billion in sales  and a $80 billion market cap,  

Delta is as of this writing Taiwan's third most  valuable company behind only TSMC and Foxconn.

The stock has skyrocketed 150% so far this year.  

Guess why? Hint it starts  with “A” and ends with “I”.

Delta’s climb to its current heights  took over half a century. In this  

video, we talk about a quiet  Taiwanese power supply giant.

## Beginnings

Bruce Cheng, or Cheng Chonghua (鄭崇華)  was born in 1936 in Fujian province.

His father was a traditional  Chinese doctor and his mother,  

a teacher descended from a  line of prosperous scholars.

Soon after Bruce was born, the family  relocated to a small town in Fujian  

called Shuiji (水吉) to avoid the dangers  of the ongoing war with the Japanese.

There, Bruce spent his formative years in relative  safety - a time he fondly recalls in his memoirs,  

titled "Solid Power". Which was one of this  video's major sources regarding Delta's early  

years and in many cases literally the only  source for certain happenings in the company.

After World War II ended, the Chinese  Civil War began. Classes were suspended,  

so in 1948 the 12-year old Bruce was sent to  Fuzhou to be with his uncle. Soon afterwards,  

Shuiji fell to the Communists and Bruce would  not see his parents again for another 35 years.

Chaos reigned in Fuzhou as the  Nationalists started to lose  

the war. Bruce's uncle found a job in Taichung,  

Taiwan as a teacher for a high school. So  Bruce came along - his parents having no idea.

Taiwan was very poor back then. Due to  the evacuation, a million people came  

to Taiwan Island - causing its population  to surge 13% in a single year. Conflicts  

between these newcomers ("Waishengren")  and the natives ("Benshengren") abounded.

Bruce worked hard and kept to  himself, and won a seat to study  

electrical engineering at the prestigious  National Cheng Kung University in Tainan.

After graduating, he struggled to find work. Cheng  

recalled being so poor that he did  not dare get married to his fiancee.

Fortunately, he found work with a  Taiwanese air maintenance company  

called Air Asia - unrelated to  the Malaysian airline today.

After five years there, he then  became a production manager at  

TRW - an American electronics components company.  

TRW had bought several US factories  and was moving production to Taiwan.

So TRW paid for Bruce to travel to  a small town in Illinois to train.  

The factory workers knew that they  were training their replacements,  

but nevertheless treated Bruce and  his cohorts with kindness and grace.

After working at TRW for five years  - and seeing their labor practices  

firsthand - Bruce quit to start  his own company - determined to  

take advantage of the then-booming  Taiwanese television set market.

## The Taiwan TV Boom In the mid-1960s, intense competition in

the US television set space forced  American companies to go overseas.

For those companies, Taiwan offered a  massive pool of cheap but trainable and  

productive labor. Women's wages there  were one-fifteenth that of America's,  

a third of Japan's or Mexico's  and half that of Hong Kong's.

Beyond just low wages, however, the  Taiwanese government also produced  

an environment that was politically  stable - thanks to American aid - plus  

was friendlier to foreign investment than  geographically closer locales like Mexico.

Notably, the government had devalued the  Taiwanese currency in the 1950s. And a  

1954 foreign investment law allowed  100% foreign ownership of companies,  

plus the ability to repatriate profits  made without significant restrictions.

In 1964, the American company General  Instrument set up a $1 million factory in  

Taipei's Xindian district to produce TV tuners  and deflection yokes. All products were for  

export rather than domestic consumption.  Zenith and RCA soon followed thereafter.

Once the Americans started producing in Taiwan,  the Japanese electronics companies had to do  

the same lest they lose on cost advantages.  Thus Sanyo/Sampo and Panasonic pivoted from  

selling TVs to domestic consumers  to producing for exports as well.

Between 1969 and 1981, TV production  in Taiwan - black-and-white at first  

and then color sets - grew at a  staggering annual rate of 41.9%.

## Tatung & the TV Coils

At the time, Taiwan had a few  electronics companies of their  

own. The most well known was Tatung  (sometimes also called "Datung").

Founded in 1918 during the Japanese colonial era  as a construction company, Tatung expanded into  

iron and steel. In the 1950s, they started selling  electric fans, their famous rice cookers and TVs.

Analog televisions depend on finely  produced electrical components to  

"catch" the TV signal out of the air, clean it up,  

and amplify it for presentation on the  screen. These machines depend on coils.

Though mostly made of simple copper wire,  the coils must be wound with precision  

and with consistency at high volume. There  was no local supplier in Taiwan, so Tatung  

imported their coils and other components  from their Japanese partners like Toshiba.

While he was still at TRW, Bruce visited  Tatung for a meeting and helped them  

troubleshoot a technical problem they  were then having. This turned into a  

consulting agreement. Then the Tatung people  suggested that Bruce start a supplies company.

While mulling it over, Bruce came across  the perfect factory site at the edge of  

some rice fields whilst cycling in  the Xinzhuang district of Taipei.  

The rent was not expensive and he took the place  on the spot. Thus in 1971 began Delta Electronics.

Despite being a small factory  of about 10-15 employees,  

Bruce - having before heard  what foreigners at TRW said  

about Chinese workmanship - pushed hard to  meet international standards of quality.

Delta's first products were coils and Intermediate  Frequency Transformers - a coil-based component  

that transfers a TV signal from one amplifier to  another. To produce at high volume and quality,  

Delta produced their own automated factory lines,  including sophisticated coil winding machines.

The hard work paid off. Delta's products  were found to be as good as Japan's - not  

to mention, half the price - and  Tatung became Delta's customer.

In 1973, the company faced troubles due to  the economic turmoil of the first Oil Crisis,  

but was saved thanks to orders  from foreign companies like TRW,  

RCA, Zenith, and the Dutch  electronics giant Philips.

Growth returned and by the mid-1970s,  millions of televisions were shipped  

out with Delta's coils. In its first decade,  Delta's growth compounded at an average of 69%.

## From TVs to PCs Bruce Cheng named his company Delta to imbue

the concept of change right  into its guiding principles.

In a Financial Times interview in 2011, he said:

> We strive for change because it brings new  opportunities, new challenges and greater success.  

Successful entrepreneurs must have the agility  and flexibility to respond to market changes

In 1978, the Taiwanese - along with the Japanese  and Koreans - agreed to limit exports of TVs to  

the US. TV volumes collapsed so Taiwan's  electronics industry pivoted to producing  

calculators and - interestingly enough  - video game consoles. For a little bit.

One hit product however were Apple II  microcomputer clones. Simple to make  

but popular, these illegal items boomed. But  in 1983 Apple successfully sued to stop this,  

forcing the industry to pivot to PC clones.  And thus took off Taiwan’s PC industry.

Delta Electronics had to change too. Competition  in the coil and IFT businesses were intensifying,  

forcing Delta to cut prices 2-5% each year.  Delta's response was to improve designs and  

manufacturing processes. But eventually they knew  they had to introduce new products in a new space.

Their first PC-related products  were EMI/RFI noise filters. One  

issue with early PCs was that their  power and signals lines emitted high  

frequency electromagnetic noise signals that  interfered with other electronics like TVs.

The noise got so bad that European authorities  banned imports from certain US companies.  

EMI filters help remove that noise while  letting through normal signals or power.

Digital Equipment Corporation's Taiwan  affiliate reached out to Delta to see if  

they can supply them with filters. Delta jumped  at the chance to enter a new product category.

The dominant EMI filter supplier at the  time was an American company called Corcom.  

Bruce and Delta studied Corcom's  products, made improvements,  

and designed a broad range of models to  cater to different customers - 150 in total.

Delta's products were not only  cheaper than Corcom's but also  

suffered ten times fewer defects. They  started selling EMI filter components to  

companies like the now-forgotten  Wang Computer, Xerox, and IBM.

## The Power Supply Pivot

Delta then branched into a new  opportunity: Power supplies.

The power supply unit's core job is  to convert AC power from the wall  

plug into low voltage DC power that  your electronics system can "eat".

The first type of power supplies to  emerge are the linear types. It uses  

a large iron-core transformer to first  step down the AC wall power to a safer,  

lower voltage. Then a rectifier diode  circuit converts that AC to low voltage  

DC current. Then finally a linear regulator  drops the voltage to the desired output.

Linear power supplies are cheap, dead simple  to implement, and low noise, but are also  

physically large and heavy due to that iron-core  transformer. They also need a heat sink, because  

that linear regulator dissipates excess voltage as  heat. This reduced efficiencies to a low 40-60%.

So people looked to a new type of power supply:  

switched types. The ideas behind them have  been around since the 1930s but it was during  

the Apollo space program of the 1960s, that  NASA scientists finally cracked the design.

Switched power supplies use MOSFETs to rapidly  

turn a current on and off hundreds  of thousands of times per second.  

It is significantly more complex to do but  physically smaller, lighter and more efficient.

Which is why the Apple II microcomputer hit  the market in 1977 with one. Steve Wozniak  

recalled that a linear power supply would  have melted the plastic case. So Steve Jobs  

tapped an Atari engineer named Rod Holt to  implement a fanless switched power supply,  

manufactured by the Hong Kong company Astec.

He was quite proud of this, saying  somewhat bombastically in his biography:

> That switching power supply was as  revolutionary as the Apple II logic  

board was. Rod doesn't get a lot of credit  for this in the history books but he should.  

Every computer now uses switching power  supplies, and they all rip off Rod Holt's design

The wonderful Ken Shirriff wrote a  blog post addressing this claim. I  

recommend it as usual. Jobs was wrong -  the IBM PC's power supplies had little  

in common with the Apple II's - but it  marks the trend. Switched over linear.

Anyway, getting back on topic. Delta  produced large volumes of items like  

coils and EMI filters. But with each  item priced at just a few cents,  

the company did not make a lot of  revenue - about $2.9 million USD in 1979.

Realizing that the unit prices of these EMI  filters were not going to grow very much,  

Bruce directed Delta into power supplies. In 1981,  

they hired a team of ex-RCA engineers and  worked on a design for over two years.

Released in 1983, the new switched power  supply leveraged Delta’s EMI filter expertise  

to filter out electrical noise - one of  the more technically challenging parts of  

producing a good switched power supply. The  new product attracted buyers like Acer, NEC,  

Epson, and IBM. Revenue that year surged 87.5%.

Several years later, Delta adopted  IBM's surface mounting technology  

to put electronic components  directly onto the surface of  

a printed circuit board. Thus shrinking  the power supplies' sizes yet further.

In 1988, Delta's revenue reached $100 million  USD. In just five years after their first switched  

power supply, revenues had grown nine times over.  That same year, they went public, Taiwan's eighth  

company to do so, though Bruce and his family  retained control of Delta and its affiliates.

## Diversifying Geographies

Delta's first foray abroad was with  sales offices in the US in 1980,  

Switzerland in 1987, and Japan in 1989.

A power supply is tightly integrated with  the rest of the system. Such collaboration  

often requires a local office. Moreover,  manufacturing costs in Taiwan were rising  

due to an appreciating currency, improving  lifestyles, and declining birth rates.

So in 1987, Delta built their first overseas  factory - producing switching power supplies - in  

the Mexican state of Sonora. In an November  1989 interview, a senior Delta manager said:

> Labor costs in Mexico are only one-third to  one-half of those in Taiwan. The workers are  

not inefficient. And we save transportation  costs when our products enter the US market.

Bruce recalls that the factory had been  built at the request of their customers  

Apple and Hewlett-Packard - apparently to help  with their trade imbalances in Latin America.  

Unfamiliar with the area, they found  a Mexican studying Chinese at National  

Taiwan Normal University who  helped lead the expansion.

Shortly afterwards in 1988, Delta launched its  first factory in Thailand. Bruce apparently  

visited Malaysia too. While he found the native  Malays outwardly polite, he was dissuaded from  

investing there due to anti-Chinese sentiments.  Thailand on the other hand felt far friendlier.

I don't want to say anything more  other than there is a spectacular  

rant from Bruce about Thai  men that I will not quote.

Delta Electronics Thailand grew to employ tens of  

thousands of Thai to produce power  supplies, adaptors, thermal fans,  

automotive electronics and other components.  Most of which are for export abroad.

The subsidiary later went public  on the Thai stock markets in 1995,  

where thanks to conservative financial  management and export revenue it seemed  

to have rode out the turmoil of the Asian  Financial Crisis without much trouble.

In 1990, they opened a factory in  Scotland for the Europe market to  

service local customers DEC and IBM. They  still maintain a presence there today.

In 1992, they entered Mainland China with  their first factory in Dongguan of Guangdong,  

again for labor cost reasons. The region has since  become one of their larger manufacturing sites.

This became a problem during  the first Sino-American trade  

war in the late 2010s. Delta responded by  expanding capacity in Texas and shifting  

production out of China to Southeast  Asia. The keystone move being a $2  

billion tender in 2018 that eventually gave  them 63% ownership of the Thai subsidiary.

A savvy move because as of this writing Delta  Electronics Thailand's market cap is over $78  

billion - making it Thailand's most valuable  publicly traded company by a wide margin.

## Product Diversification

Something that stands out to me about Delta  is its staggeringly broad array of products.

By the late 1980s, you could say  that they had just two big products:  

EMI Filters and switching power supplies.  But the lineup has since rapidly expanded.

First, in direct-current brushless fans  - for cooling a power supply - and then  

networking. The networking division was  later spun off as its own company Delta  

Networks in ... 1999 at the peak of the bubble  (ouch). Delta later bought them back in 2018.

Then throughout the 1990s, Delta went  into power supplies for notebooks,  

DC power systems for telecom installations,  and uninterruptible power systems.

The latter are backup power systems that provide  critical infrastructure like data centers or  

hospital equipment with instant switchover  to some form of backup power like a battery.

And apparently they even produced color monitors  at one point, but pulled out when the market got  

too difficult. They still produce high performance  projector systems today, which is a bit strange.

This diversification seems to be due  to the company's chaebol-like tendency  

to go into a business whenever an  opportunity arises. For instance,  

entry into brushless fans happened  because they suddenly received a big  

order from IBM for power supplies, but  fan supplier Panasonic let them down.

And Uninterruptible Power Supplies. Delta got into  

this business because another company in  Tainan failed and they acquired the team.

## The Green Era Bruce Cheng retired from Delta in 2011.

He splits his job between Chairman  Yancey Hai and CEO Ping Cheng,  

but not before orienting the sprawling  conglomerate towards green sustainability.

Bruce seems genuinely concerned about  energy efficiency and greener ways of life.  

In his memoirs and interviews, he recalls  environmental damage being done in Taiwan  

from factories as well as energy struggles  during the second oil crisis of the 1970s.

In the 2000s, he pushed the company to enter  the solar power and EV spaces. First in solar,  

he had Delta partner with a solar cell production  team at Taiwan's ITRI research institute,  

founding a subsidiary called DelSolar  producing a complete solar system product.

DelSolar grew well during the 2010s, but fell  afoul of the Chinese solar cell overproduction  

bubble. With revenues on the decline,  Delta Electronics merged DelSolar in  

2012 with another Taiwanese solar cell  maker, Neo Solar Power Corporation.

The efforts in the EV space have gone somewhat  better, but still took a great deal of time.

They entered the space in 2008,  

it took until 2023 for that segment  to become profitable. Fifteen years!

They produce a wide range of sub-systems for EVs  

and hybrid cars - like charging poles or an  all-in-one electric drive system combining  

a traction motor and gearbox with an  inverter for cost and space savings.

## Delta in the AI Era

In April 2023, Nikkei Asia  quoted Chairman Hai saying  

about the then-mushrooming generative AI boom:

> Everyone is so excited about generative AI  

at the moment. But the basic question  is how do you make money from it? ...

> A traditional data center is already very  expensive. A generative-AI data center,  

embedding tens of thousands of servers,  will be three to 10 times more expensive ...

> Unless these companies can find  a sustainable business model,  

I doubt many would invest much [in building  generative AI data centers] at this stage

After 1-2 years, the turntables have  turned. Now it is the EV category  

that is in a slump. AI data centers have  replaced them as Delta's key growth engine,  

going from 2% of revenue in 2023 to an  estimated 11% this year and 20% the next.

As mentioned, AI data centers  require a whole lot more power  

delivered to the chips. Delivering  these levels of power density while  

also retaining energy efficiency and  preventing failures is very important.

Delta offers several AI data center  products across the whole stack,  

including products to bring high  voltage power right to the racks,  

both air and liquid thermal  cooling solutions, and networking.

They also offer a prefabricated,  containerized AI data center that  

can be shipped to the data center site.  I myself saw this one at Computex 2025,  

and reckon it is for those who  want to get going very fast.

I will leave the deep analysis of such  offerings as compared to competitors like  

Schneider Electric to professional firms like  SemiAnalysis. I'm just a deer with a microphone.

## Conclusion Whew! When starting this video,

I had not expected Delta Electronics  to be such a sprawling conglomerate.

I get the sense of a company built  around the vision of a single,  

very driven founder. Bruce regularly  works with engineers and scientists at  

universities in both Taiwan and abroad  to discover and fast-track new efforts.

The company is now over 50 years old and  loads more valuable than it ever has been.  

Bruce is obviously still around. But it  seems like the company - like TSMC - has  

smoothly transitioned to a new generation  of leadership. Can it keep its dynamism  

without him? Can it make the most of the AI  opportunities ahead of it? Tune in next time.