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Powi investor presentation february 2014

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  • 1. Power Integrations, Inc. Nasdaq: POWI February 2014
  • 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). © Copyright 2014 Power Integrations 2
  • 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 3
  • 4. Comprehensive Expertise in High-Voltage  Ultra-simple power converters • Fewer components • Shorter design cycles • Easier to manufacture • Higher reliability  BOM cost similar to discrete designs  Highly energy-efficient © Copyright 2014 Power Integrations 4
  • 5. Highly Integrated Power Converters Replacing Legacy Technologies Equivalent power supply with POWI: 36 components, smaller board Discrete power supply: 70 components Linear transformer: weighs 12 oz. © Copyright 2014 Power Integrations Adapter with POWI: weighs 2 oz. 5
  • 6. Relentless Innovation 700 600 609 U.S. Patents 492 Non-U.S. Patents at 12/31/2013 U.S. Patents Granted 500 400 300 200 100 0 © Copyright 2014 Power Integrations 6
  • 7. Vast Addressable Market – Power Conversion Is Needed Everywhere © Copyright 2014 Power Integrations 7
  • 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 8
  • 9. Leading Transition to IC-Based Power Supplies Power Supply Unit Volume • Fairchild • Sanken • ST Micro • ON Semi • Infineon Integrated POWI Discretes • Fairchild • Infineon • ON Semi • ST Micro • NXP • iWatt/Dialog • BCD/Diodes • Active • Leadtrend • OnBright Linear Transformers 1970 © Copyright 2014 Power Integrations 1994 9 1994 Today
  • 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 10
  • 11. 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 © Copyright 2014 Power Integrations 11
  • 12. Energy Specs Continue to Tighten  ENERGY STAR® “Most Efficient” label rewards top performers  U.S. to tighten federal standards for external power supplies  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. starting 2014 © Copyright 2014 Power Integrations 12
  • 13. “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
  • 14. Energy Vampire vs. LinkZero™ © Copyright 2014 Power Integrations 14
  • 15. 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
  • 16. Well-Positioned in LED Lighting  Traditional bulbs phasing out  LEDs need efficient, reliable drivers  Integration brings reliability, efficiency, size advantage LED Lighting Revenue >20% Growth in 2013 2007 2008 2009 © Copyright 2014 Power Integrations 2010 2011 2012 2013 16
  • 17. 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
  • 18. Rapid Charging: Emerging Trend in Mobility Charger Interface Chip + Power Conversion Chip Conventional Charging Quick Charge 2.0 PMIC  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 © Copyright 2014 Power Integrations 18 Quick Charge 2.0
  • 19. Expanding Market with Mid-Power Products LOW-POWER MID-POWER Hiper™ Family CAPZero™/SENZero™/Qspeed™ TOPSwitch™ TinySwitch™ LinkSwitch™ / LinkZero™ LED Products LinkSwitch-PL/PH / LYTSwitch™ 0W 2W © Copyright 2014 Power Integrations 5W 20W 50W 19 200W 500W
  • 20. Radically Simplifying Mid-Power Converters HiperTFS + HiperPFS HiperPFS™ and HiperTFS™ replace up to 100 components © Copyright 2014 Power Integrations 20
  • 21. More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage Boost Inductor Main Output Gate Drive EMI Filter AC Standby Output SR Main & Standby Controller PFC Controller TNY Before: Single IC for standby power supply © Copyright 2014 Power Integrations 21
  • 22. More Silicon Content at Higher Power Levels EMI Filter PFC Stage Boost Inductor Main and Standby Stage QSpeed HiperTFS CpZ Main Output SnZ Gate Drive EMI Filter AC SR Main & Standby Controller PFC Controller HiperPFS CapZero™ HiperPFS™ SenZero™ Qspeed™ HiperTFS™ main + standby Now: Up to five components, potential dollar content >5x higher © Copyright 2014 Power Integrations 22 Standby Output
  • 23. Concept Deal Extends High-Voltage Leadership  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 CONCEPT drivers reduce component count, enhance efficiency, reliability © Copyright 2014 Power Integrations 23
  • 24. Spanning the Clean-Power Ecosystem Energy Ecosystem Energy Generation Energy Transmission Energy Consumption End Markets Wind Turbines Solar Power Power Semiconductors HVDC Transmission Driver Motor Control Hybrid Vehicles Locomotive Medical Driver optimizes efficiency, operating performance and lifespan of the IGBT module © Copyright 2014 Power Integrations IGBT Module 24 IGBT module: Transistors arranged in parallel to increase switching capacity at very high currents and high voltages
  • 25. Higher-Power Products Expand SAM to $2.5B ● LED general lighting ● LED street lights ● Smart meters ● Industrial control ● UPS ● Industrial motor drives ● Wind/solar inverters ● Electric trains/cars ● DC transmission Consumer Comms Industrial Computer ● Desktop/server standby ● Desktop main ● Notebook adapters ● LCD monitors ● Printers © Copyright 2014 Power Integrations ● White goods ● Air conditioners ● TV standby / TV main ● Small appliances ● Set-top boxes ● DVD players ● Game consoles 25 ● Mobile phone chargers ● Cordless phone adapters ● Broadband modems ● VoIP phones ● Wireless routers Mid-power applications in orange High-power applications in green
  • 26. Consistent Track Record of Growth Revenues ($M) 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 © Copyright 2014 Power Integrations 26
  • 27. Outperforming the Peer Group Annual Revenue Growth POWI Analog Semis (SIA) 40% 30% 20% 10% 0% -10% 2007 2008 2009 2010 2011 2012 2013 CAGR © Copyright 2014 Power Integrations 27
  • 28. Well-Diversified Revenue Mix 2013 2002 35% Consumer 25% Consumer 23% Computer 43% Comms 34% Industrial 21% Comms 10% Computer Higher-margin industrial & consumer markets now >2/3 of revenues; cellphone chargers down from 40% to ~10% © Copyright 2014 Power Integrations 28
  • 29. Growing Cash Flow Cash Flow from Operations ($M) 100 90 One-time tax payment 80 70 60 50 40 30 20 10 0 2008 © Copyright 2014 Power Integrations 2009 2010 2011 29 2012 2013
  • 30. Strong Balance Sheet At December 31, 2013 Cash and Investments ($M)  $202M cash and investments 250 • Used $116M for Concept acquisition 200 150  No debt 100 50  Quarterly dividend increased to $0.10 in Q1 2014 0 Q3'08 Q2'10 Q1'12 Q4'13 Diluted Shares Outstanding (M)  $260M of repurchases since 2004 • Average price of $23 • Diluted share count down 5% since 2008 35 30 25 20 15 10 Q3'08 © Copyright 2014 Power Integrations 30 Q2'10 Q1'12 Q4'13
  • 31. Power Integrations, Inc. Nasdaq: POWI