1999 Annual Report - Delta Electronics

5 1999 Annual Report
Strategy
The strategy of Delta can be abbreviated as TOPS which consists of the following four
major elements:
Telecom/Datacom focus Telecommunication and data communication are gradually
becoming an indispensable part of everyday life, and the associated business potential is
self-evident. Delta is committed to play an important role and capture the business
opportunity in communications industries as a key components and systems supplier.
Delta already has such products for telecom/datacom industries as chip inductors for
cellular phones and cordless phones, active GPS antenna, GPS receiver module,
RF/microwave products, VCO (voltage controlled oscillator), base station telecom rack
power, and networking products such as routers and LAN components. Moreover,
Delta has recently established ventures in developing fiber optical transceivers and other
passive components for cellular phones.
Outsourcing business It is well recognized that the demand for electronics
manufacturing services (EMS) will increase significantly. In today's highly competitive
marketplace, it is crucial for companies to focus on their core competencies for the
highest added value, and subsequently out-source the remaining business systems
components to external credible players. According to recent statistics, the value for
EMS is expected to grow 40-60% for the next few years, on top of over 30% growth in
the past 5 years.
Delta is well regarded in the electronics OEM/ODM business. We have devoted
significant resources and accumulated experiences to increase manufacturing flexibility,
construct global logistics networks, assure quality standards, and continue to reduce
manufacturing costs as well as turn-around time to ensure that Delta has the capability
to provide high performance contract manufacturing services. In addition, Delta has 8
plants with more than 1.8 million square feet manufacturing space to meet the everincreasing
demand for EMS.
Product development It is no doubt that product research and development
contributes significantly to the continuous success of Delta. The essence of product
development in Delta encompasses a wide spectrum of activities from material research,
new product development, product performance improvement, cost reduction to
manufacturing process redesign. In-time input from customers is critical to ensure the
success of product development, and as a result, customer participation is evidenced
through most of the R&D processes.
The whole notion of Delta's restless efforts on product development centers on the
mission of bringing better products at lower prices to meet today and tomorrow's
customer needs. In 1999, Delta spent NT$ 1.9 billion, or US$ 60 million, on R&D
activities, up from NT$ 1.3 billion, or US$ 43 million, in 1998. Delta believes that the
importance of product development will continue to increase, and we are committed to
serving customer needs through top-notch R&D efforts.
Strategic investment While Delta had relied on internal growth for business
expansion in the past, we realized that strategic investment is as essential as organic
growth to beat today's competitive environment. Successful strategic investment not
only brings in complementary skills, but also helps to strengthen core competencies and
feed new ideas to the current organization.
As of the end of 1999, Delta's investment portfolio consists of 35 companies with
market value of above NT$ 12 billion, or approximately US$ 400 million. The income
from investments contributed 21% of the per share earnings in 1999, and the
contribution from strategic investment is expected to increase in 2000.
Implementing TOPS strategy through committed management, we believe that Delta
will continue to enjoy unparalleled success in the future.
1999 Annual Report
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