Delta Electronics, a major supplier of power and cooling systems for AI data centers, warned that it expects costs to go up in the coming quarters. This is due to rising oil prices and ongoing shortages of materials. The company also noted signs of inflation, which is being driven by the high demand for AI technology.
Delta Electronics stated that its production capacity remains tight. To address this, the company is expanding its operations in China, Thailand, the United States, and Taiwan. In February, the company reported that its capital spending totaled T46.1billion(46.1billion(1.46 billion) in 2025. On Thursday, it repeated that this spending would be even higher this year.
Delta Electronics counts big names like Nvidia and major cloud service providers such as Google and Meta Platforms among its customers. Delta Electronics is currently the second most valuable company on the Taiwan stock exchange. Its market value is $178.46 billion, trailing only Taiwan Semiconductor Manufacturing Co Ltd. The company reported first-quarter revenue of T159.35billion(159.35billion(5.02 billion), a 34% increase from a year earlier. This growth was fueled by the construction of AI data centers. Its gross profit also jumped 56% year-over-year to T59billion(59billion(1.86 billion).
Delta Electronics shares have surged 124.82% so far this this year, significantly outperforming the broader market, which saw a 34.4% rise. The company’s shares closed flat on Thursday before its earnings report was released.
This warning about rising costs highlights a growing concern in the tech industry. While demand for AI infrastructure is booming, the supply chain is feeling the pressure from geopolitical factors and increased raw material costs. Companies like Delta, which are essential to building the foundations of the AI era, are now navigating these economic headwinds. Their expansion plans reflect a long-term commitment to meeting AI demand, despite the immediate challenges.
