powi investor presentation january 2014

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  • Power Integrations, Inc.Nasdaq: POWI

    January 2014

  • Copyright 2014 Power Integrations 2

    Forward-Looking Statements/Non-GAAP Metrics

    These slides accompany an oral presentation by Power Integrations, Inc., whichcontains forward-looking statements. Each statement relating to events that will ormay occur in the future is a forward-looking statement. The Companys actualresults may differ materially from those suggested in the presentation. Informationconcerning factors that could cause such a difference is contained in theCompanys 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).

  • Copyright 2014 Power Integrations 3

    Secular Growth Story in Analog Semis Focused on 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

  • Copyright 2014 Power Integrations 4

    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

  • Copyright 2014 Power Integrations 5

    Highly Integrated Power Converters Replacing Legacy Technologies

    Discrete DVD power supply: 70 components

    Equivalent power supply with POWI:36 components, smaller board

    Linear transformer: weighs 12 oz.

    Adapter with POWI: weighs 2 oz.

  • Copyright 2014 Power Integrations 6

    Relentless Innovation

    534 U.S. Patents390 Non-U.S. Patents

    at 12/31/2012

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  • Copyright 2014 Power Integrations 7

    Vast Addressable Market Power Conversion Is Needed Everywhere

  • Copyright 2014 Power Integrations 8

    Long-Term Secular Growth Drivers

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

  • Copyright 2014 Power Integrations 9

    Leading Transition to IC-Based Power Supplies

    Linear Transformers

    1970 1994

    Discretes

    1994 Today1970

    IntegratedFairchildSankenST MicroON Semi Infineon POWI

    iWatt/DialogBCD/DiodesActiveLeadtrendOnBright

    Fairchild InfineonON SemiST MicroNXP 80%

    20%

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    o

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  • Copyright 2014 Power Integrations 10

    Long-Term Secular Growth Drivers

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

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

  • Copyright 2014 Power Integrations 11

    Energy Specs Continue to Tighten

    ENERGY STAR Most Efficient label rewards top performers

    New CEC battery-charger standards in 2013; U.S. to tighten federal standards for external power supplies

    European standby power limitation tightened to 0.5 W in 2013

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

  • Copyright 2014 Power Integrations 12

    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

  • Copyright 2014 Power Integrations 13

    Energy Vampire vs. LinkZero

  • Copyright 2014 Power Integrations 14

    Long-Term Secular Growth Drivers

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

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

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

  • Copyright 2014 Power Integrations 15

    Well-Positioned in LED Lighting

    Traditional bulbs phasing out LEDs need efficient, reliable drivers Integration brings reliability, efficiency,

    size advantage

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    5

    10

    15

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    25

    2007 2008 2009 2010 2011 2012

    LED Lighting Revenues ($M)

  • Copyright 2014 Power Integrations 16

    Long-Term Secular Growth Drivers

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

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

    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

  • Copyright 2014 Power Integrations 17

    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

    ConventionalCharging

    Quick Charge 2.0

    Quick Charge 2.0 PMIC

    Charger Interface Chip + Power Conversion Chip

  • Copyright 2014 Power Integrations 18

    Expanding Market with Mid-Power Products

    0W 500W5W 50W2W 20W 200W

    CAPZero/SENZero/Qspeed

    Hiper Family

    TOPSwitch

    TinySwitch

    LinkSwitch / LinkZeroLinkSwitch-PL/PH / LYTSwitch

    LED Products

    LOW-POWER MID-POWER

  • Copyright 2014 Power Integrations 19

    Radically Simplifying Mid-Power Converters

    HiperPFS and HiperTFS replace up to 100 components

    HiperTFS + HiperPFS

  • Copyright 2014 Power Integrations 20

    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

  • Copyright 2014 Power Integrations 21

    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 + standbyCapZero HiperPFS SenZero Qspeed

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

  • Copyright 2014 Power Integrations 22

    Concept Deal Extends High-Voltage Leadership

    CONCEPT drivers reduce component count, enhance efficiency, reliability

    Acquired CT-Concept in 2012

    IGBT drivers for industrial motors, renewables, locomotives, DC transmission

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

    Broadens POWI opportunity in clean-power applications

  • Copyright 2014 Power Integrations 23

    Spanning the Clean-Power EcosystemEnergy

    Ecosystem

    Energy Generation

    Energy Transmission

    Energy Consumption

    Wind TurbinesSolar Power

    HVDC Transmission

    Motor ControlHybrid Vehicles

    LocomotiveMedical

    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 ModuleDriver

  • Copyright 2014 Power Integrations 24

    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

  • Copyright 2014 Power Integrations 25

    Consistent Track Record of Growth

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    40

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

    Revenue ($M)

  • Copyright 2014 Power Integrations 26

    Outperforming the Peer Group

    -10%

    0%

    10%

    20%

    30%

    40%

    2007 2008 2009 2010 2011 2012 6-yearCAGR

    Annual Revenue Growth POWIAnalog Semis (SIA)

  • Copyright 2014 Power Integrations 27

    Recent Outperformance Masked by End-Customer Mix in Cellphone Chargers

    -10%

    0%

    10%

    2011 2012

    0%

    2%

    5%

    9%

    5%

    2%

    0% -7%

    Year/Year Revenue Growth

    POWIPOWI ex