Download - Powi investor presentation july 2014

Power Integrations, Inc. Nasdaq: POWI

July 2014

© Copyright 2014 Power Integrations 2

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.powerint.com (see “Historical Financials” data file).

http://investors.powerint.com/

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


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

BOM cost similar to discrete designs

Highly energy-efficient

Comprehensive Expertise in High-Voltage


Highly Integrated Power Converters Replacing Legacy Technologies

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.


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U.S

. Pat

ents

Gra

nted

Relentless Innovation

609 U.S. Patents 492 Non-U.S. Patents

at 12/31/2013


Vast Addressable Market – Power Conversion Is Needed Everywhere


Long-Term Secular Growth Drivers

1. 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

•Fairchild •Sanken •ST Micro •ON Semi • Infineon POWI

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

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

wer

Sup

ply

Uni

t Vol

ume




2. 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 tightens federal standards for external power supplies

ENERGY STAR® “Most Efficient” label rewards top performers

New battery-charger standards in California in 2013

European standby power limitation tightened to 0.5 W in 2013

Traditional 40 W and 60 W light bulbs banned in U.S. as of 2014


“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™





3. 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

2007 2008 2009 2010 2011 2012 2013

LED Lighting Revenue>20% Growth in 2013





3. LED lighting • Requires low-cost, efficient, reliable power supplies

4. 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% POWI is lead strategic partner on the charger side Higher dollar content than a standard charger

Conventional Charging

Quick Charge 2.0

Quick Charge 2.0 PMIC

Charger Interface Chip + Power Conversion Chip

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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 Market with Mid-Power Products

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

CAPZero™/SENZero™/Qspeed™

Hiper™ Family

TOPSwitch™

TinySwitch™

LinkSwitch™ / LinkZero™

LinkSwitch-PL/PH / LYTSwitch™ LED Products

LOW-POWER MID-POWER


Radically Simplifying Mid-Power Converters

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

CONCEPT drivers reduce component count, enhance efficiency, reliability

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


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

● Mobile phone chargers ● Cordless phone adapters ● Broadband modems ● VoIP phones ● Wireless routers ● Desktop/server standby

● Desktop main ● Notebook adapters ● LCD monitors ● Printers

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

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

Consumer

Comms

Computer

Industrial

Mid-power applications in orange

High-power applications in green


Consistent Track Record of Growth

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Revenues ($M)


Outperforming the Peer Group

-10%

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10%

20%

30%

40%

2007 2008 2009 2010 2011 2012 2013 CAGR

Annual Revenue Growth POWIAnalog Semis (SIA)


Well-Diversified Revenue Mix

25% Consumer

23% Computer

43% Comms

2002 2013

21% Comms

35% Consumer

34% Industrial

10% Computer

Higher-margin industrial & consumer markets now >2/3 of revenues; cellphone chargers down from 40% to ~10%


Growing Cash Flow

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Cash Flow from Operations ($M)

One-time tax payment


Strong Balance Sheet

$212M cash and investments • Used $116M for Concept acquisition

No debt Quarterly dividend of $0.12/share

$286M of repurchases since 2004

• $26M in Q2 2014 (avg. price <$50/share) • Diluted share count down 5% since 2008

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Q3'08 Q2'14

Cash and Investments ($M)

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Q3'08 Q2'14

Diluted Shares Outstanding (M)

At June 30, 2014

Power Integrations, Inc. Nasdaq: POWI

Download - Powi investor presentation july 2014

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