1999 Annual Report - Delta Electronics

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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 6
7 1999 Annual Report Major Products Standard SPS Server/Workstation SPS Networking SPS Distributed SPS DC/DC Converter Voltage Regulation Module UPS Rack-Mounted UPS Power Image Presentation (Display) Components Networking Products Sub-System Products Mainstation, BSC, BTS Adapter Charger AC Motor Drive Hi-Resolution Color Monitor Internet Display LCD Projector Stereoscopic-3D Display LCCS Display Magnetics Spindle Motor GPS Receiver Module Voltage Controlled Oscillator DC-Fan & CPU Cooling System Ballast GPS Antenna EMI Filter Networking Components Chip Inductor Battery Pack Chassis Based Switch Stackable Switch Gigabit Intelligent Switch 16-Port Gigabit Uplink Switch ADSL Router (Above products are supplied by our subsidiary DNI) DVD-ROM CD-RW CD-R CD-ROM Disk Array (Custom Design) 1999 Annual Report 8
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Page 18 and 19: Inventories Inventories are stated
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Page 26 and 27: The initial conversion price, which
Page 28 and 29: 13) Legal reserve The R.O.C Company
Page 30 and 31: payment of the final tax assessment
Page 32 and 33: G. Accounts payable DET DEJ Others
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Page 36 and 37: When the contracts mature, there wi
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Page 42 and 43: 50 D. Marketable securities acquire
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Page 46 and 47: 13. SEGMENTAL FINANCIAL INFORMATION
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1999 Annual Report - Delta Electronics

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