Dear Shareholders:

Delta Electronics had outstanding performance in 2006. Not only did we reach record highs in sales revenues, profits and market value, we also experienced success in every business unit, and continued to lead in power supplies and electrical components. In addition, we earned support from our customers in solar cells, and CCFLs for TFT-LCD monitors, and continue to develop and increase sales in networking products. Below is a summary of Delta's operations in 2006.

Delta's consolidated sales revenues totaled NT$105.2 billion, an increase of 30% compared to 2005. Compared to 2005, gross profit totaled NT$22.5 billion with an increase of 40%; net profit totaled NT$12.4 billion with an increase of 67%; and net income after tax totaled NT$11.3 billion with an increase of 50%. Earnings per Share (EPS) for 2006 totaled NT$5.76. Delta is proactive in yearly budget allocation and our achievements in 2006 have exceeded the internal budget objectives of our major financial indices. I would like to express my deep appreciation to our management team and employees for their hard work and contributions.

In the power supply business, Delta has continued its leading position in switching power supplies and we are the world's number one in market shares for servers, workstations, PCs, laptops, and game consoles. We continue researching and developing products with new functions and designs and we are enthusiastic in meeting market trends and the demands of customers in the rapidly changing electrical product markets. In addition, we have established closer cooperative relationships with our customers, as we grow with them and strengthen Delta's competitive edge in the global power supply markets. As for electrical components, in addition to maintaining high growth in every category, Delta has actively developed high value-added products to face keen market competition. Our DC brushless fans & blowers was number one in global market share in 2006, which is a good example of Delta's competitiveness in electrical components. As for the industrial automation business, Delta's own-design servo motor made its appearance in 2006, receiving high recognition from the market upon its launch. Delta's industrial automation products such as converters and human machine interfaces (HMI) have received certificates from major European and Japanese companies. This is helping to build a base for future business. For the Visual Display business, we have made tremendous progress in developing high quality projection technology, which we believe will contribute significantly in the future. Delta's networking business also has an outstanding performance last year. Delta Networks Inc. (DNI) has obtained orders from global key networking players. DNI continues to enhance its competitiveness and is recognized for its quality and service. DNI experienced high growth in both sales revenues and profits. We anticipate that DNI will maintain high growth rates in the coming years and will become an important source of Delta's profits.

Environmental protection and energy saving have long been an important part of Delta's corporate mission, carried out in both product development and daily operations. An example is Delta's Tainan plant, which was awarded a gold-rated green building certificate by the Ministry of the Interior in 2006, and has become the most recognized green factory in Taiwan. Delta's subsidiaries are also dedicated to enhancing the efficiency of power management products and developing products with environmental protection and energy saving features. DelSolar has expertise in the research and development and manufacturing of solar cells, and is proceeding well, with revenues and profits growing rapidly. Faced by a shortage of raw materials, DelSolar has maintained stable operations and is headed for its planned objectives. We believe that as soon as the raw material market becomes stable, DelSolar will produce outstanding results. Cyntec has not only continued to develop high-efficiency energy-saving electrical components for home appliance markets, it has also concentrated on developing micro and IC technologies. Building a foundation for many years, Cyntec had excellent performance in portable IT product markets in 2006, and has earned the trust of customers and established a stable foundation for future development. In recent years, people have become aware of environmental protection and energy saving. In addition to paying attention to the issues of energy consumption and pollution prevention, the issue of how to reduce carbon-dioxide has become an urgent issue. We are happy to see that many corporations and the general public have started join us with their resources and energy. We believe that our joint efforts can expedite the realization and development of the green business concept, embody corporate social responsibility, and result in a clean living environment for generations to come.

Technologies that Delta has accumulated for the past 35 years are the foundation for our future growth. Looking to the future, in addition to our existing product fields, Delta will concentrate on the development of green energy, while promoting green facilities. We will invest more in research and development and deepen our knowledge in materials to strengthen Delta's core competencies and create a stable operational environment.

Technology is Delta's foundation. The endeavors of our employees and recognition from our customers are what drive Delta forward. Delta received a best supplier award from Fujitsu Siemens and attained recognition from SONY and Microsoft. In addition to the continuing trust and cooperation of our long term customers, employees are Delta's most important asset. We have carried out a series of systematic development plans for our global management teams, and we are seeding teams for our future businesses. This will align the training and growth of chosen employees with the direction of corporate development, and meet the needs of high-level management teams in the future. Our aim is to cultivate a pool of the most suitable talents for international technology and management.

As Delta pursues business development, we are also dedicated to corporate social responsibility and providing the most value to shareholders, employees and society as a whole. Delta was named The Most Admired company in the Electronics industry by CommonWealth magazine for 5 consecutive years, and received Corporate Social Responsibility awards from GlobalViews magazine for 2 consecutive years. Delta was also rated A-class in information disclosure by the Taiwan Securities and Exchange Corporation in 2006. In addition to enhancing the public's understanding of Delta by delivering precise, real time information, we hope this will inspire Delta to become an even better corporation and enhance our positive influence on society.

I wish to take this opportunity to thank our employees for their contributions to the corporation and helping Delta achieve its objectives. I also highly appreciate the continuing support of Delta's board members, shareholders, customers and suppliers, which allow us to maintain our healthy growth. This year we will adhere to our steadfast belief in sustainable operation and try our best to meet everyone's expectations. We sincerely hope our shareholders will continue to support and encourage Delta and together we can make each year better than the last.

Sincerely yours,

Bruce CH Cheng
Chairman