Dear Shareholders,

In 2021, the continuing recovery of the global economy led to a breakthrough in the economic growth rates of the United States, Europe, and Taiwan for three quarters compared to the previous decade. However, some issues such as imbalanced supply chains, labor shortages and rising inflation pressures in countries with unstable epidemic situations and recovering economies are gradually being addressed to move toward normalization of the world economy. Amid the uncertainties of last year, Delta was fortunate enough to achieve growth in its annual revenue and earnings per share (EPS). The 2021 consolidated revenue reached NT$314.7 billion, which is an increase by 11%; the gross profit reached NT$90.2 billion, a gross profit margin of 28.7%; the net operating profit was NT$31.4 billion, a net profit margin of 10.0%; the net income after tax was NT$26.8 billion, with a net after-tax profit margin of 8.5%; the earnings per share (EPS) was NT$10.3, and a return on equity (ROE) of 17.8%.

Business operations in different countries inevitably encountered a variety of challenges over the short-term. However, with its consistent commitment to the environment, society and its shareholders, Delta officially joined the RE100 initiative in 2021, undertaking to achieve 100% renewable energy usage in all of its sites across the globe by 2030, as well as carbon neutrality. Delta is the first company in Taiwan's high-tech manufacturing industry to commit to reaching the RE100 target by 2030.

Below are Delta's performance and vision relevant to the Company's business portfolio in 2021:

Power Electronics

Delta is a world-class leader in the power supply industry. It provides global customers with highly efficient power supply products including, but not limited to, cloud computing, information and communication equipment, industrial, medical, lighting, machine tools, and electric vehicles to global customers using the most state-of-the-art power electronics technology. Given the current smart factory trend, Delta released a wireless charging solution for unmanned trucks and industrial unmanned vehicles ahead of its peers in 2021, achieving fully automated and unmanned operation, which is the final step toward the application of AI manufacturing solutions to manual plugging and unplugging issues.

Delta has done its best to improve its R&D capabilities over the years. It has gained a foothold not only in the global power supply sector, but also in businesses related to brushless DC fans and miniaturization of key components. With its excellent product performance and energy efficiency, Delta was named 2021 Energy Star® Partner of the Year for six consecutive years by the U.S. Environmental Protection Agency (EPA) and carrying the distinguished Sustained Excellence honor for the fourth year in a row, demonstrating its product excellence in terms of environmental sustainability.

In order to stop global warming, many countries have proposed a timetable for the gradual phase-out of fossil fuel vehicles. With policies and car manufacturers supporting such a campaign, fossil fuel-powered vehicles would most likely become obsolete in the near future. In view of this, Delta entered the electric vehicle market with its power converters as part of its first stage of development – Delta Inside. Now in its second stage of development – Powered by Delta – the company provides motor drives and motor control systems for electric vehicles for major international car manufacturers. The next stage – Driven by Delta – aims to launch an all-in-one solution consisting of motor drives, motor controls, decelerators and other components, in collaboration with partners through strategic alliances to create a low-carbon future.

Automation

Delta's years of extensive and solid manufacturing experience as well as automation technology led to a full-scale transformation and upgrade of the Company's Taoyuan Plant 1 in 2021. The transformation began with the design of a production line, followed by an incremental percentage use of intelligent equipment, as technologies such as Augmented Reality (AI), Mixed Reality (MR) and Virtual Reality (VR) were also utilized. Big data analysis also plays a role in optimizing information for the production process, making Delta's Taoyuan Plant 1 a next-generation demo site for smart manufacturing. In addition, Delta has enabled customers to carry out production with customized volume and patterns by enhancing the experience and practice of robust smart manufacturing as a stable solution to the next generation of manufacturing.

In 2021, to strengthen its smart architecture roadmap, Delta acquired a Canadian company March Networks and its 100% owned subsidiaries which specializes in video surveillance and business intelligent. March Networks' Video Surveillance as a Service (VSaas) is expected to further expand Delta's diversified applications in smart buildings and cities, using the Internet-of-Things (IoT) to provide smart solutions.

Infrastructure

The rapid development of global IoT and cloud computing has dynamically driven the power supply of data centers. To help customers build green data centers with greater efficiency and energy-saving results, Delta introduced a new "Panama power supply solution" that integrates electrical and magnetic circuits, thus converting medium-voltage 10KV AC to 240V DC directly and positioning power transmission by means of a single step. Many large data centers, including Alibaba and three major telecom companies in China, have successfully applied this solution. The total power capacity goes beyond 500MW with up to 98% energy efficiency, which is the estimated power consumption in Taiwan, equivalent to 32,000 households a year.

The pressure to reduce carbon emissions due to climate change is also likely to result in the development of critical policies aimed at transitioning to low-carbon transportation in the next decade. Delta has made significant investments in labor and the R&D of charging piles for more than ten years, with output reaching more than 1 million pieces globally. Its customer base covers international first-tier car manufacturers, major operators, and governments of various countries. In 2021, Delta worked with North-Star International Co., Ltd. in connection with the latter's charging station brand "Tail Power" for the establishment of the first expressway electric vehicle fast charging station at the Xiluo service area along National Highway No. 1 in Taiwan, which will encourage local traditional gas stations to make changes.

Despite the global importance of an incremental ratio in the use of renewable energy, renewable energy for intermittent power generation has an impact on the dispatching of traditional power grids, thereby increasing the risks of large-scale power outages or power interruptions. In the power supply value chain, Delta has been concerned with changes in the global power industry over the years. In addition to cooperation with companies involved in power generation, transmission, distribution, and sales, Delta also helps end-users such as companies or households. It expects to build a more flexible and resilient power system with renewable energy, energy storage systems and energy management platforms.

For half a century, Delta has taken countermeasures to fight against global warming and climate change. In the 2021 Dow Jones Sustainability Indices (DJSI), a significant indicator of global corporate competitiveness, Delta has been selected for the DJSI World for eleven consecutive years, and the DJSI-Emerging Markets for nine consecutive years. What's more, Delta's 'Climate Change' and 'Water Security' campaigns were also included in the Leadership Level of the 2021 CDP (originally Carbon Disclosure Project) climate change report. CDP recognized the consistency of Delta's business development strategy on low-carbon emissions, in which the Board of Directors is actively involved in sustainability strategies, while the management team leads the sustainability committee to promote various climate action initiatives as part of the company's core business and daily operations. It is worth noting that Delta has been selected as Best Taiwan Global Brand for eleven consecutive years and its brand value climbed once again in 2021, with significant growth over the past nine consecutive years and double-digit growth for the last three years, for an increase of 19% compared to that of 2020, reaching USD395 million.

The year 2021 was Delta's 50th anniversary. Looking back on the past half century, Delta has kept its core values and practices for creating a friendly environment, giving feedback to society, caring for employees and sustainable development, and leading all employees and partners toward a brighter future amid constant challenges. The Company is deeply thankful to all of its employees, customers, shareholders, and partners for their unwavering support. Delta is extending its invitation to more customers to work together, reduce global carbon footprints, strive to relieve the threats of extreme climate change, and plan the next 50 sustainable and low-carbon targets for Delta in the years to come.

Finally, wish everyone good health and good luck.