Company Presentation

Power Integrations, Inc.
Nasdaq: POWI

March 2013

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 2013 Power Integrations 2

Secular Growth Story in Analog Semis
 Leader in bringing integration to high-voltage power conversion
 Energy efficiency driving faster market penetration
 Strong position in LED lighting
 Expanding addressable market with higher-power products and
strategic transactions


Highly Integrated Power Supplies Replacing
Legacy Technologies

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

Linear
transformer: Adapter with POWI:
weighs 12 oz. weighs 2 oz.


Dimensions of Innovation

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

 BOM cost similar to
discrete designs

 Highly energy-efficient


Relentless Innovation
600
534 U.S. Patents
390 Non-U.S. Patents
500 at 12/31/2012

400
U.S. Patents Granted

300

200

100

0


Broad 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

• Fairchild
• Sanken Integrated
• ST Micro
• ON Semi
Power Supply Unit Volume

• Infineon POWI
20%

• Fairchild • iWatt
• Infineon • BCD
Discretes • ON Semi • Active
• ST Micro • Leadtrend
• NXP • OnBright 80%

Linear Transformers

1970 1994 1994 Today



2. Energy-efficiency
• Driven by standards and consumer awareness


Recognized Leader in Energy Efficiency

 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

 New ENERGY STAR® label rewards
top performers in designated product
categories

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

 European standby power limitation
tightens to 0.5 W as of 2013


“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 incandescent lights
phasing out
 LEDs need efficient, reliable drivers
 Integration, single-stage architecture
bring reliability, efficiency, low cost
LED Lighting Revenues ($M)

25

20

15

10

5

0
2007 2008 2009 2010 2011 2012




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

4. Expanding addressable market to higher power levels
• Mid-power (50-500 W) products plus Concept acquisition expand
addressable market by $1 billion


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 5W 20W 50W 200W 500W


Radically Simplifying Mid-Power Converters

HiperTFS + HiperPFS

HiperPFS™ and HiperTFS™ replace up to 100 components

More Silicon Content at Higher Power Levels

EMI Filter PFC Stage Main and Standby Stage

Boost Inductor

Main
Output
Gate
AC EMI Filter Drive
Standby
SR Output
Main &
Standby
Controller

PFC TNY
Controller

Before: Single IC for standby power supply

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

Boost Inductor QSpeed

HiperTFS

CpZ
Main
SnZ
Output
Gate
AC EMI Filter Drive
Standby
SR Output
Main &
Standby
Controller

PFC
Controller

HiperPFS

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

Now: Up to five components, 5x-10x the dollar content

CONCEPT: Highly Integrated IGBT Drivers

 Acquired in May 2012

 Applications: industrial
motors, solar/wind power,
electric trains and cars

 Addressable market
approaching $500M

 Adds ~10% to POWI revenue

Highly integrated drivers enhance cost, efficiency, size, reliability

Spanning the Clean-Power Ecosystem
Energy
Ecosystem
End Markets
Energy
Wind Turbines
Generation Solar Power Power
Semiconductors

HVDC IGBT
Energy Module
Transmission Driver
Transmission

Motor Control
Hybrid Vehicles
Energy Locomotive
Consumption Medical

Driver optimizes efficiency, IGBT module: Transistors arranged
operating performance and in parallel to increase switching
lifespan of the IGBT module capacity at very high currents and
high voltages


Higher-Power Products Expand SAM to $2.5B
● White goods
● Air conditioners
● TV standby / TV main
● LED general lighting ● Small appliances
Consumer
● LED street lights ● Set-top boxes
● Smart meters ● DVD players
● Industrial control Comms ● Game consoles
● UPS
● Industrial motor drives Industrial
● Wind/solar inverters Computer ● Mobile phone chargers
● Electric trains/cars
● Cordless phone adapters
● DC transmission
● Broadband modems
● VoIP phones
● Desktop/server standby ● Wireless routers
● Desktop main
● Notebook adapters
● LCD monitors Mid-power applications in orange
● Printers High-power applications in green


Consistent Track Record of Growth
Revenue ($M)
320

280

240

200

160

120

80

40

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Outperforming the Peer Group
POWI
Annual Revenue Growth
Analog Semis (SIA)
40%

30%

20%

10%

0%

-10%

2007 2008 2009 2010 2011 2012 6-year
CAGR

Headwinds Abating in Cellphone Market
Year/Year Revenue Growth
10% 9%

5% 5%

2%
2%
0% 0% -7%
0%

POWI
POWI ex-cellphone
POWI organic ex-cellphone
Analog Semis (SIA)

-10%
2011 2012

Challenging end-customer mix in 2011-2012, but exited 2012 with sequential growth

Well Diversified Revenue Mix

2012
2002

25% 36%
Consumer Consumer

43% 28% Industrial
23% Comms 24%
Computer Comms

11%
Computer

Higher-margin industrial & consumer markets now ~2/3 of revenues;
cellphone chargers down from ~40% to less than 15%


Consistent Cash Flow Generation

Cash Flow from Operations ($M)

100
90
80 Effect of
one-time tax
70 payment
60
50
40
30
20
10
0
2008 2009 2010 2011 2012


Strong Balance Sheet
At December 31, 2012
Cash and Investments ($M)
 $95M cash and investments 250
• Used $116M for Concept acquisition 200
• $43M tax payment in Q3’12; tax rate
down to single digits in 2013 150

100

 No debt 50

0
Q3'08 Q4'12
 Quarterly dividend of $0.08/share Diluted Shares Outstanding (M)
• Announced 60% increase for 2013 35

30

 $260M of repurchases since 2004 25

• Repurchased >2% of outstanding shares 20
in Q4 2012 for ~$30/share
15

10
Q3'08 Q4'12


Prudently Returning Cash to Stockholders
Shares
Outstanding (M)
 $260M of share
35
repurchases since 2004

 Avg. price of repurchased
30 shares: ~ $23

 7% net reduction in
25
outstanding shares
(February 2004 to February 2013)

20
 13th “most profitable”
buyback since 2000
15 (The Buyback Monitor, July 2011*)

2004 2013
*Survey period January 2000 through March
2011; included 252 companies


Power Integrations, Inc.
Nasdaq: POWI

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