Delta Electronics (Thailand), the country’s largest listed company by market value, expects continued double-digit sales growth for at least the next couple of years as demand for AI-related technology rises.

The firm, which supplies components for data centers and EVs, said it will increase investment to support expansion, said CEO Victor Cheng.

Delta predicts that AI-related products, including data center and networking equipment, will make up half its sales by the end of the year, up from 42% in the latest quarter.

The company is expanding research and development in Thailand, adding more than 100 engineers this year for a total of about 400 engineers among its 20,000 local employees.

Two new production facilities near Bangkok are set to start operations in Q4 to meet demand for power, thermal solutions, and other components.

US tariffs remain a challenge, but Delta says it can pass nearly all the tariff costs to customers, with the US making up as much as 35% of its sales.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Delta’s stock surge reflects broader concerns about AI bubble valuations

CEO Victor Cheng’s public concern about Delta’s stock price being “too high” aligns with objective valuation metrics that suggest potential overvaluation.

The company’s shares increased 74% in just three months while Thailand’s SET Index gained only 5%, creating a dramatic performance gap1.

Delta Thailand now trades at a P/E ratio of 87x for 2025 forecasts, significantly above historical averages for industrial companies1.

Delta Thailand’s market capitalization now exceeds its Taiwanese parent company by 20%, despite the parent having a much broader global footprint and larger revenue base1.

This valuation disconnect raises concerns about market enthusiasm pushing prices beyond fundamental business metrics, a trend observed in some AI-focused companies.

2️⃣ Trade tensions accelerate Southeast Asian manufacturing expansion

Delta’s current challenge with 19% US tariffs on Thai exports represents the latest chapter in a broader strategic shift away from China-centric manufacturing.