Delta Electronics Identifies Material, Power, and Labor Shortages as Key Bottlenecks for AI Data Center Expansion
Delta Electronics reported record Q3 revenue but warned that material shortages, power constraints, and skilled labor gaps are hindering smooth supply chain growth amid the AI infrastructure boom.
Taiwan-based power and component manufacturer Delta Electronics held its third-quarter earnings call on October 29. Liu Liangfu, Chairman and CEO of Delta Capital, stated that as global demand for AI infrastructure surges, insufficient raw material supply, difficulty in securing power, and a shortage of specialized technical personnel have become the three major bottlenecks for data center expansion, making it difficult to maintain smooth revenue growth across the supply chain.
In terms of financial performance, Delta's consolidated revenue for Q3 reached NT$197.059 billion, up 31% year-over-year, marking a new historical high. Net income attributable to the parent company was NT$23.495 billion, up 26% year-over-year. However, affected by supply chain shortages and delays in some data center constructions, shipments of certain products were obstructed, leading to increased inventory. Combined with accounting recognition related to inventory write-downs, the gross margin dropped to approximately 34.1%, a quarter-over-quarter decrease of about 1.5 percentage points.
Liu detailed the three bottlenecks. First is the raw material supply issue; the supply chains for semiconductors and certain passive components cannot significantly increase capacity in a short time, further affecting equipment delivery progress. Second is power supply. Currently, global data center electricity consumption is about 500 TWh, accounting for roughly 1.5% of global electricity use. If extrapolated based on current expansion scales, power demand could double to about 1,000 TWh by 2030. In addition to relying on existing grids, data centers may need to build behind-the-meter power systems.