company presentation

Power Integrations, Inc. Nasdaq: POWI

August 2015

Forward-Looking Statements/Non-GAAP Metrics These slides accompany an oral presentation by Power Integrations, Inc., which contains forward-looking statements. Each statement relating to events that will or may occur in the future is a forward-looking statement. The Company’s actual results may differ materially from those suggested in the presentation. Information concerning factors that could cause such a difference is contained in the Company’s most recent reports on Form 10-K and 10-Q. This presentation may also contain certain non-GAAP financial information. Reconciliations of non-GAAP financial metrics to GAAP results are available at the end of this presentation and/or on the investor page of the Power Integrations website, http://investors.power.com (see “Historical Financials” data file).

©2015 Power Integrations | www.power.com 2

http://investors.powerint.com/

Secular Growth Story in Analog Semis Leader in energy-efficient high-voltage power conversion Clean-tech enabler: efficient appliances, LED lighting, DC motor drives, renewable energy, electric transportation Expanding market opportunity with higher-power products, rapid-charging for mobile devices Double-digit revenue CAGR since 2001


Comprehensive Expertise in High-Voltage Systems &

Applications Know-How

Integrated Process

Technology

High- Voltage

Technology


Ultra-simple power converters Fewer components Shorter design cycles Easier to manufacture Higher reliability

BOM cost similar to discrete designs

Highly energy-efficient

Power

Package Innovations

Discrete power supply: 70 components Equivalent power supply with POWI: 36 components, smaller board

Linear transformer: weighs 12 oz.

Adapter with POWI: weighs 2 oz.

Highly Integrated Power Converters Replacing Legacy Technologies


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U.S

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Relentless Innovation

734 U.S. Patents at 6/30/2015


Vast Addressable Market – Power Conversion Is Needed Everywhere


Long-Term Secular Growth Drivers Ongoing transition to IC-based power supplies

Integration saves labor and materials, improves reliability


Leading Transition to IC-Based Power Supplies

Linear Transformers

1970 1994

Discretes

1994 Today 1970

Integrated POWI

• iWatt/Dialog • BCD/Diodes • Active • Leadtrend • OnBright

• Fairchild • Infineon • ON Semi • ST Micro • NXP

Pow

er S

uppl

y U

nit V

olum

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Fairchild Sanken ST Micro ON Semi Infineon


InnoSwitch™: A New Level of Integration

First IC to integrate primary and secondary sides of power supply across safety barrier

Enables drastic reduction in component count, complexity

Highly energy-efficient


Secondary Primary

Long-Term Secular Growth Drivers

Ongoing transition to IC-based power supplies Integration saves labor and materials, improves reliability

Energy-efficient electronics & appliances Driven by standards and consumer awareness


Recognized Leader in Clean Technology Member of clean-tech stock indices

The Cleantech Index (CTIUS) Nasdaq Clean Edge Green Energy (CELS) Ardour Global Index (AGIGL)

Twice named a top 20 sustainable stock by SustainableBusiness.com

ENERGY STAR® award recipient

Star of Energy Efficiency award recipient


Energy Specs Continue to Tighten U.S. Dept. of Energy tightening federal standards for external power supplies effective 2016

ENERGY STAR® “Most Efficient” label rewards top performers

SEAD competition to recognize most efficient TVs

European standby power limitation tightened to 0.5 W in 2013

Traditional incandescent bulbs banned in U.S.


“Zero” Series Zeroes Out Standby Waste CAPZero™ eliminates waste from X-cap bleed resistors

SENZero™ disconnects sense resistors in main power supply

LinkZero™ cuts waste to 0.00 W in chargers and auxiliary power supplies


Energy Vampire vs. LinkZero™





LED lighting Requires low-cost, efficient, reliable power supplies


Well-Positioned in LED Lighting Traditional bulbs phasing out LEDs need efficient, reliable drivers

Integration brings reliability, efficiency, size advantage

LYTSwitch™ products offer highest level of integration available





LED lighting Requires low-cost, efficient, reliable power supplies

Expanding market opportunity Rapid charging for mobile-device market Higher-power products add ~$1B to addressable market


Rapid Charging: Emerging Trend in Mobility

Larger batteries causing extended downtime for charging

Qualcomm Quick Charge 2.0 cuts charge time up to 75%

Requires greater integration and efficiency vs. standard chargers; higher dollar content

Conventional Charging

Quick Charge 2.0

Quick Charge 2.0 PMIC

InnoSwitch™ + ChiPhy™ Interface Chip


http://www.google.com/url?sa=i&rct=j&q=clock+face&source=images&cd=&cad=rja&docid=CqMI23ExZc4XhM&tbnid=EO3viT6L0KIQTM:&ved=0CAUQjRw&url=http://images.devilfinder.com/go.php?q=The+Clock+face+&ei=aUVJUbCLBoe_igL_sICoBQ&bvm=bv.44011176,d.cGE&psig=AFQjCNFQp6HDpu_TutNG3tAtEw7nF3FSIw&ust=1363842722770627

http://www.google.com/url?sa=i&rct=j&q=clock+face&source=images&cd=&cad=rja&docid=CqMI23ExZc4XhM&tbnid=EO3viT6L0KIQTM:&ved=0CAUQjRw&url=http://images.devilfinder.com/go.php?q=The+Clock+face+&ei=aUVJUbCLBoe_igL_sICoBQ&bvm=bv.44011176,d.cGE&psig=AFQjCNFQp6HDpu_TutNG3tAtEw7nF3FSIw&ust=1363842722770627

Expanding Reach to Higher Power Levels

0W 500W 5W 50W 2W 20W 200W

CAPZero™/SENZero™/Qspeed™

Hiper™ Family

TOPSwitch™

TinySwitch™

LinkSwitch™ / InnoSwitch™

LYTSwitch™ LED Products


Radically Simplifying Power Supplies for PCs, TVs

HiperPFS™ and HiperTFS™ replace up to 100 components

HiperTFS + HiperPFS


More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage

Main & Standby Controller

Boost Inductor

PFC Controller

EMI Filter StandbyOutput

ACGate Drive

SR

Main Output

TNY

Before: Single IC for standby power supply


More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage

Main & Standby Controller

Boost Inductor

PFC Controller

EMI Filter StandbyOutput

AC

HiperPFS

HiperTFS

CpZ

Gate Drive

SnZ

QSpeed

SR

Main Output

HiperTFS™ main + standby CapZero™ HiperPFS™ SenZero™ Qspeed™

Now: Up to five components, potential dollar content >5x higher


Acquisition Extends Power Range Further Acquired CT-Concept in 2012

IGBT drivers for industrial motors, renewable energy, locomotives, DC transmission

Addressable market ~$500M; now >10% of POWI revenue

Broadens POWI opportunity in clean-power applications

SCALE™ drivers reduce component count, enhance efficiency, reliability


Spanning the Clean-Power Ecosystem Energy Ecosystem

Energy

Generation

Energy Transmission

Energy Consumption

Wind Turbines Solar Power

HVDC Transmission

Motor Control Hybrid Vehicles

Locomotive Medical

End Markets

Power Semiconductors

IGBT module: Transistors arranged in parallel to increase switching capacity at very high

currents and high voltages

Driver optimizes efficiency, operating

performance and lifespan of the IGBT module

IGBT Module

Driver


Higher-Power Products Expand SAM to $2.5B

Consumer

Comms Computer

Industrial

Mid-power applications in orange High-power applications in green

● Desktop/server standby ● Desktop main ● Notebook adapters ● LCD monitors ● Printers

● LED general lighting ● LED street lights ● Smart meters ● Industrial control ● UPS ● Industrial motor drives ● Wind/solar inverters ● Electric trains/cars ● DC transmission

● White goods ● Air conditioners ● TV standby / TV main ● Small appliances ● Set-top boxes ● DVD players ● Game consoles

● Mobile phone chargers ● Cordless phone adapters ● Broadband modems ● VoIP phones ● Wireless routers


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©2015 Power Integrations | www.power.com

Track Record of Growth

Well-Diversified Revenue Mix

23% Computer

43% Comms

2002 2014

18% Comms

37% Consumer

35% Industrial

10% Computer

Higher-margin industrial & consumer markets now >70% of revenues

24% Consumer

9% Industrial


Strong Cash Generation

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Cash Flow from Operations ($M)

One-time tax payment


Strong Balance Sheet

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Q3'08 Q4'10 Q1'13 Q2'15

Diluted Shares Outstanding (M)

At June 30, 2015

$171M cash and investments Used $116M for Concept acquisition, $23M for CamSemi acquisition

No debt

Quarterly dividend of $0.12/share

Diluted share count down 8% since 2008 on share repurchases

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Q3'08 Q4'10 Q1'13 Q2'15

Cash and Investments ($M)

Power Integrations, Inc. Nasdaq: POWI

company presentation

Documents

power integrations website

integrated power converters

discrete power supply

higherpower products

efficient appliances

renewable energy

gaap results

oral presentation