Delta Electronics set a record NT$197.1 billion quarter; Vicor's ITC case targets the same AI server modules

Delta Electronics▼−9.80% — Delta Electronics, down 9.80 percent today, the Taiwanese power-and-thermal supplier inside AI servers and data centers, posted a second straight record quarter↗ this week: NT$197.1 billion of revenue, up 31% year over year ¹. Profit rose more slowly than sales, and gross margin slipped to 34.1% ¹². Four banks cut their targets on the company's Thai listing the same week, and the Taipei shares closed down 9.8% ³⁴. The buildout is still handing Delta volume; the week's verdict was about Delta's margin.

Demand is delivering volume, and it is concentrating

Delta builds the server power shelves and liquid cooling that AI racks run on, and it is working with Nvidia▼−4.86% — Nvidia, down 4.86 percent today on the 800-volt DC architecture those processors will draw from ³. When cloud operators build data centers, the power has to flow through this equipment, and the quarterly mix now shows it: the power-and-components division grew 40% year over year and now carries most of Delta's sales, with infrastructure, the data-center systems business, up 25% ¹. Record revenue is exactly what an AI buildout should print for its power supplier.

The supplier is absorbing the cost of getting racks built

The squeeze shows in the Thai listing, Delta Electronics Thailand, which consolidates much of the group's manufacturing. Operating margin fell to 10.4% from 14.1% a year earlier↗ as selling costs jumped 69% ⁴. The same quarter absorbed a THB 1.9 billion inventory provision, up from THB 0.8 billion in the second quarter ⁵, plus freight, US customs duties and a THB 1.4 billion charge under the OECD's Pillar Two global minimum tax ⁴. Thai net profit of THB 7.76 billion missed the Bloomberg consensus of THB 8.73 billion ⁴.

Macquarie, UBS, JPMorgan and Citi▼−3.43% — Citi, down 3.43 percent today cut their targets ⁴, and Bualuang cut its 2026 core-profit forecast by 18%↗ ⁵. The bull's best rebuttal is already in the record: through nine months, revenue grew 37% and net profit 62%, so profit is still outgrowing sales on the year ².

The third quarter is the inflection to watch, not an established trend; the gap came from a lower gross margin and declining nonoperating income ¹². Bualuang still expects fourth-quarter profit to recover as supply constraints ease and backlog ships ⁵. That recovery call, not the demand line, is the test.

The licensor's rates rise as the case advances

Vicor's▼−9.10% — Vicor, down 9.10 percent today royalty quarter is not the news: the $66.6 million figure and the interest from two hyperscalers, the largest cloud operators, were already on the record last week ⁶⁷. What moved since is the machinery around that line. On October 9 the US International Trade Commission, the US trade agency that can bar imports of infringing products, instituted Vicor's second Section 337 investigation↗, this one over vertical power delivery, the converter stage that steps voltage down right beside the AI processor ⁸.

The named respondents include Delta Electronics, Infineon, Luxshare, Monolithic Power Systems▼−0.17% — Monolithic Power Systems, down 0.17 percent today, Flex▼−8.21% — Flex, down 8.21 percent today, Celestica▼−7.69% — Celestica, down 7.69 percent today, Quanta and Foxconn▼−1.01% — Foxconn, down 1.01 percent today ⁹, and Vicor has asked for a limited exclusion order↗ that would keep infringing modules out of the United States ⁹. Vicor's release also states that any equipment maker or cloud operator whose systems use VPD parts from the respondents will need a license to import them ⁹.

Management now treats royalties as recurring: at least $43 million in Q4↗ ⁷, with stage-3 license rates rising roughly 5% a month once an ITC investigation is under way ⁷⁹. Vicor's consolidated gross margin stands at 68.3% ⁷. Its take rises with enforcement while Delta's margin absorbs the costs of getting racks built.

Where the margin settles

In one quarter Delta's Thai unit absorbed an inventory provision, freight, customs duties and a global minimum tax ⁴⁵; Vicor's license rates are built to climb as its US case advances ⁷⁹. The buildout is real, and the builders who turn power engineering into deployed racks deserve the reward for it. But the quarter showed where the bargaining power sits: the supplier's costs are episodic, while a settled royalty rate, or an exclusion order, would move a slice of every AI rack's margin permanently.

Holders of Delta, and by read-across Monolithic Power Systems, a respondent in the same case ⁹, and Vertiv▼−6.58% — Vertiv, down 6.58 percent today, should track which side captures the next point of margin. If Bualuang's fourth-quarter recovery lands, Delta buys time; if Vicor's stage-3 escalation runs first, the take compounds ⁹.