As raw material prices and labor costs continue to rise, and many SMEs are in deep trouble, some electronics industry giants are beginning to complain.

Recently, in the world's largest manufacturer of switching power supply products Delta Electronics (2308. TW) legal representative meeting, Delta Chief of Implementation of Changhai said that in the face of the economic downturn, the company has started the same period with the financial crisis The graded “strain mechanism” requires employees to open source and reduce expenditure, “take more orders”, “don’t eat rice that should not be eaten,” and even require company executives to open video conferences to reduce travel costs.

According to financial reports released by Delta Electronics in the third quarter, the company’s operating income in the second quarter was NT$43.7 billion, an increase of 9% from the first quarter, and gross profit was 19.9%, a decrease of 0.9% from the first quarter. Throughout the first half of the year, gross profit margin was only 19.5%, which was nearly 2 percentage points lower than 21.4% in the same period of last year. After-tax net income was NT$5,763 million, a decrease of 26.5% year-on-year.

Yesterday (August 22nd), Ms. Fengfeng Ye, the head of Delta's Public Relations Department, explained to the reporter that although the financial statements showed a poor performance. However, in fact, the operation of Delta Electronics in the first half of the year did not fluctuate significantly. “The high-tech companies of Delta Electronics in the mainland region will enjoy preferential tax rates, but in the first half of the year, high-tech companies have not yet been identified, so accounting practices have adopted a more conservative approach. Compared with last year, the main difference is that At the tax rate," she said.

In the eyes of Hai handsome, due to the third quarter of the downstream sales are still in stock, Delta's challenge will start from this time. “In the past, Delta’s operating income in the third quarter will increase by more than 10% from the second quarter, but this year’s growth percentage can only be a single digit, but the third quarter gross margin will be slightly better than the second quarter,” he said. Introduced at the briefing.

He believes that U.S. home loans, car loans, and credit card loans are 137% of U.S. income. U.S. government bonds are equivalent to the entire GDP, which will change the people's spending habits. In addition to the relatively good performance of Europe in Germany, many other countries are mostly struggling, which will affect overall spending power.

He Zaihua, a senior research fellow at China Investment Consulting Co., Ltd., pointed out that the macroeconomic situation is weak, and the current global semiconductor industrial chain inventory level is high, and the market is mainly digesting inventory. Although the expectation of Christmas storage has certain support for the market in the fourth quarter, due to the situation in the third quarter that the market is not prosperous during the peak season, the market has retained its expectations for the fourth quarter.

According to Delta's description, it is estimated that the inventory correction is nearing completion and that orders will rebound in the fourth quarter. However, market pressure has increased significantly, and industry profits have been relatively lower. Whether the improvement of Delta's operating conditions in the second half of the year can hedge the economic environment and The decline in profits mainly depends on the extent of business performance and cost savings.

Denies China Factory to lay off 6000

Earlier it was reported that Hai handsome said at the legal briefing that this year Delta will reduce its manpower by 10% in the mainland, that is, the production line will cut 6,000 people.

Ye Fenglian said that this is a wrong report. She further explained that Hai Handsome mentioned in the legal briefing that the rise in the wages of mainland company workers is an inevitable trend. For Delta, it is important to use existing people to do more efficient things and use automation. To improve the efficiency of the production line, this improvement can be equivalent to saving 10% of the manpower, so it is understood to cut 10% of the staff. "Even if Delta didn't lay off its staff during the 2009 financial tsunami, it wouldn't be this time. It just wanted to use the same manpower to do more and better things," she said.

On August 22, the reporters respectively called on Delta’s subsidiaries in mainland China—Zhongda Electronics (Jiangsu) Co., Ltd. in Wujiang City and Delta Electronics Enterprise Management (Shanghai) Co., Ltd., both of which have human resources departments. The reporter stated that at present, the company has not laid off its staff, nor has it heard of plans for layoffs. In addition, the reporter also saw from Delta's website that currently Delta’s recruitment in factories in Dongguan, Wuhu, Wujiang, and Tianjin is also underway.

He Zaihua analyzed that the current economic situation has not seen a large area of ​​improvement and lack of motivation. Most of the companies are in poor operating conditions. With the increase in raw material costs and labor costs, there is a large gap in labor supply and demand, and mechanical replacement of labor is a guarantee for enterprises. Profits follow a trend of market development.

He said that from the current market conditions, although the acceleration of mechanized alternatives is not at a high level, fundamentally speaking, this market-oriented revolution will promote the adjustment of production factors by enterprises and will be a process that companies must undergo. Alternatives will be the long-term development trend in the future.