POWI investor presentation january 2014

Power Integrations, Inc.
Nasdaq: POWI
January 2014

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

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


3

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


4

Highly Integrated Power Converters
Replacing Legacy Technologies

Equivalent power supply with POWI:
36 components, smaller board

Discrete DVD power supply:
70 components

Linear
transformer:
weighs 12 oz.


Adapter with POWI:
weighs 2 oz.

5

Relentless Innovation
600

534 U.S. Patents
390 Non-U.S. Patents

U.S. Patents Granted

500

at 12/31/2012

400

300

200

100

0


6

Vast Addressable Market –
Power Conversion Is Needed Everywhere


7

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

Integration saves labor and materials, improves reliability


8

Leading Transition to IC-Based Power Supplies

Power Supply Unit Volume

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

Integrated
POWI
20%

Discretes

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

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

Linear Transformers
1970

1994
9

1994 Today

80%

• Integration saves labor and materials, improves reliability
2. Energy-efficient electronics & appliances
• Driven by standards and consumer awareness


10

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

11

“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


12

Energy Vampire vs. LinkZero™


13

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


14

Well-Positioned in LED Lighting
 Traditional bulbs phasing out
 LEDs need efficient, reliable drivers
 Integration brings reliability, efficiency,
size advantage
LED Lighting Revenues ($M)
25
20
15
10
5
0

2007

2008

2009


2010

2011

2012
15

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


16

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


17

Quick Charge 2.0

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

18

200W

500W

Radically Simplifying Mid-Power Converters

HiperTFS + HiperPFS

HiperPFS™ and HiperTFS™ replace up to 100 components

19

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

20

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

21

Standby
Output

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

22

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


IGBT
Module

23

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

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

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

24

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

Mid-power applications in orange
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

25

Outperforming the Peer Group
Annual Revenue Growth

POWI
Analog Semis (SIA)

40%

30%

20%

10%

0%

-10%

2007


2008

2009

2010

26

2011

2012 6-year
CAGR

Recent Outperformance Masked by EndCustomer Mix in Cellphone Chargers
Year/Year Revenue Growth
10%

9%

5%

5%
2%

0%

2%
-7%

0%

0%
POWI
POWI ex-cellphone
POWI organic ex-cellphone
Analog Semis (SIA)

-10%

2011


2012

27

Well-Diversified Revenue Mix
2013 (Nine Months)

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%

28

Consistent Cash Flow Generation
Cash Flow from Operations ($M)

100
90
Effect of onetime tax
payment

80
70
60
50
40
30
20
10
0

2008


2009

2010

2011

29

2012

Strong Balance Sheet
At September 30, 2013

Cash and Investments ($M)

 $180M cash and investments

250

• Used $116M for Concept acquisition

200
150

 No debt

100
50

 Quarterly dividend increasing to
$0.10 in Q1 2014

0
Q3'08

Q1'11

Q3'13

Diluted Shares Outstanding (M)

 $260M of repurchases since 2004
• Average price of $23
• 6% net reduction in shares outstanding

35
30
25

(Feb. 2004 – Feb. 2013)

20
15
10
Q3'08


30

Q1'11

Q3'13

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


31

Power Integrations, Inc.
Nasdaq: POWI

POWI investor presentation january 2014

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