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TRANSCRIPT
Power Integrations, Inc.Nasdaq: POWI
December 2019
Forward-Looking Statements/Non-GAAP MetricsThese 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 report on Form 10-K.
This presentation may also contain certain non-GAAP financial information. Reconciliations of non-GAAP financial metrics to GAAP results are available on the investor page of the Power Integrations website, http://investors.power.com.
©2019 Power Integrations | www.power.com 2
Technology leader in ICs for energy-efficient AC-DC power supplies
High-efficiency driver ICs energizingthe LED-lighting revolution
Reliable gate drivers for vital systems when safety is paramount
Highly efficient, reliable and integrated motor drivers
ICs for Energy Production, Transmission & Consumption
3©2019 Power Integrations | www.power.com
Comprehensive Expertise in High Voltage
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Ultra-simple power convertersFewer componentsShorter design cyclesEasier to manufactureHigher reliability
BOM cost similar to discrete designs
Highly energy-efficient
Long-Term Secular Growth DriversOngoing transition to IC-based power supplies
Integration saves labor and materials, improves reliability
Energy-efficient electronics & appliancesDriven by standards and consumer awareness
Expanding market opportunity – SAM up more than 2x since 2010Faster charging for mobile devicesHome & building automation / smart lighting and appliances / IoTBattery-powered tools, e-bikes, electric transportationBridgeSwitch™ motor-drive ICs expand appliance SAMLED lighting
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The Power Integrations Advantage
6©2019 Power Integrations | www.power.com
Conventional Phone Charger - More than 60 Components
EMI filter and bridge rectifier Isolation transformer Synchronous rectification
Output current and voltage control
Opto-coupler feedback
Switching MOSFET and current sense
The Power Integrations Advantage
7©2019 Power Integrations | www.power.com
Phone-charger Power Supply Using InnoSwitch-CH – only 24 parts
InnoSwitch™ • Switching MOSFET• Current sense• FluxLink™ replaces opto-coupler• Synchronous rectification driver• Output current and voltage control
Hiper™ products replace up to 100 components
Simplifying Power for PCs, TVs, eBike Chargers
8©2019 Power Integrations | www.power.com
HiperPFS, HiperLCS / HiperTFS
InnoSwitch™: A Higher Level of IntegrationFirst IC to integrate primary and secondary sides of power supply across safety barrier
Enabled by FluxLink™ technology
Drastic reduction in component count, complexityHighly energy-efficient
Very high efficiencyVery low standby consumption
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SecondaryPrimary
65 W adapter with discretes: 72 components, two heatsinks, 144 cm3
65 W adapter with POWI InnoSwitch™3 39 components, no heatsinks, 59 cm3
Highly Integrated Converters Replace Discretes
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Gallium-nitride (GaN) transistors are better than siliconMore efficient, cooler, smaller power suppliesLeading the way to “no-heatsink” designs at high power levels
GaN transistor technology is the future for power conversion
POWI approach is to enclose and protect the GaN device in our ICsEngineers see significant performance benefitsBut won’t otherwise notice a change
InnoSwitch Now with GaN Technology
11©2019 Power Integrations | www.power.com
Aftermarket USB PD adaptersHigh-end cellphone/tablet chargersNotebook adapters
GaN for Size and Efficiency
12©2019 Power Integrations | www.power.com
Products with size OR efficiency needsAppliances, TVs, server standby, AIO PCs, video games
Applications requiring feature benefits of InnoSwitch, but with more power
Spanning the Power Range
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0 W 500 W5 W 50 W2 W 20 W 200 W
LinkSwitch™
AC-DCLED DriversGate Drivers
10 kW 100 kW100 W
SCALE-iDriver™+ SCALE™-2
Up to 120 W
Up to 75 W
Hiper Family / CAPZero™
SENZero™ / Qspeed ™
1 GW
LED Driver Products – LYTSwitch™
Up to 65 WInnoSwitch3™
TinySwitch™
TOPSwitch™
BridgeSwitch™
Motor Drivers
©2019 Power Integrations | www.power.com
Power Everywhere
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Addressable Market Now $4 Billion
Consumer
Comms
Computer
Industrial
High-power applications in red
● Desktop/server standby● Desktop main● Notebook/tablet adapters● LCD monitors● Printers
● LED lighting● Home/building automation● Smart meters ● Industrial controls● Battery-powered tools● UPS● Industrial motor drives● Wind/solar inverters● Electric trains/buses● DC transmission● Medical
● White goods● Air conditioners● TV standby / TV main● Small appliances● Set-top boxes● DVD players● Game consoles
● Mobile phone chargers● Cordless phone adapters● Broadband modems● VoIP phones● Wireless routers
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Recognized Leader in Energy EfficiencyMember of clean-tech stock indices
The Cleantech Index (CTIUS)Nasdaq Clean Edge Green Energy (CELS)Ardour Global Index (AGIGL)ECPI Global Clean Energy Index (GALPHCLN)
Twice named a top 20 sustainable stockby SustainableBusiness.com
ENERGY STAR® award recipient
Star of Energy Efficiency award recipient
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EcoSmart™ Technology Saves Energy
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>13 billion EcoSmart chips sold since 1998
Over 110B kWh of standby energy saved
>$10B saved by end users
Millions of tons of CO2
emissions averted
©2019 Power Integrations | www.power.com
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Estimated Energy Savings from EcoSmart Devices
kWh saved (B) Units Sold (B)
Energy Vampire vs. LinkZero™
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“Zero” Series Eliminates WasteLinkZero™ cuts waste to 0.00 W in chargers and auxiliary power supplies
CAPZero™ removes waste from X-cap bleed resistors
SENZero™ disconnects sense resistors in main power supply
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External power supply requirements in Europe tightening for 2020
ENERGY STAR® “Most Efficient” label rewards top performers
SEAD awards for connected efficiency
In 2020, light bulbs in U.S. required to be 60-70% more efficient than standard incandescent bulbs
Energy-Efficiency Specs Drive Innovation
20©2019 Power Integrations | www.power.com
Technology Trends Bring SAM ExpansionRapid charging for mobile-device market
Faster chargers = greater dollar content and needs higher efficiency
Home & building automation / smart lighting and appliances / IoTSmarter homes and appliances = more power needed = greater POWI dollar content
Electrification creating new opportunities in tools, transportationLithium-ion batteries replacing gas and plug-in electric in lawn equipment, vacuumsElectric cars, locomotives, buses, delivery vehicles, etc.
Conversion to brushless DC motors in appliancesNew BridgeSwitch™ ICs target motors up to 300W
LED lighting – requires AC-DC drivers
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Faster chargers for bigger batteries, shorter charge timesDemands ICs with high integration and maximum efficiency
InnoSwitch3 for Rapid Charging
22©2019 Power Integrations | www.power.com
ConventionalCharging
With PI Chipset
IoT / Home Automation
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USB-C power receptacle with InnoSwitch3
Reliability, low standby power critical for IoT devices and USB receptacles
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Gate Drivers for High-Power MarketAcquired CT-Concept in 2012 Addressing applications 10 kW to 1 GW
DC industrial motors, renewable energy, electric transportation, DC transmission
SCALE-iDriver™ expands addressable market from ~$500M to ~$1B Now >10% of revenues
SCALE™ drivers reduce component count, enhance efficiency, reliability
SCALE-iDriver Applications
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Solar
Motor Drives MedicalUPS
Welding / Cutting Commercial Vehicles, Automotive
SCALE-iDriver for Electric Vehicles
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For drivetrain, DC-DC, chargingReliability, safety, efficiency critical for auto marketTens of $ of content/carCan drive IGBTs or SiC MOSFETs
©2019 Power Integrations | www.power.com
98.5% efficiency
Integrated Half-Bridge (IHB) architecture eliminates heatsinks
Built-in protectionSimplifies and shortens regulatory approvalHardware fault management simplifies software
Ideal for appliances – white goods and industrialCeiling fans, water pumps, air-conditioning, motors
BridgeSwitch™ Motor-Driver ICs for BLDC Motors
27©2019 Power Integrations | www.power.com
Traditional light sources phasing outLEDs need efficient, reliable AC-DC driversIntegration brings reliability, efficiency, size advantage
LYTSwitch™ Drivers for LED Lighting
28©2019 Power Integrations | www.power.com
Global PresenceHeadquarters in San José, CaliforniaDesign centers: U.S., Canada, Switzerland, UK, Germany, Malaysia, Philippines19 field labs worldwide
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Assembly Subcontractor Wafer Foundry (Lapis, EPSON, X-FAB, Toshiba)
PI Locations
Target Financial ModelLow-double-digit revenue growth
9% CAGR since 2001
Non-GAAP gross margin 50-55% 52.7% in 2018
Non-GAAP operating margin 20%+19.8% in 2018
Non-GAAP tax rate 7-8%
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Note: Non-GAAP results exclude amortization of acquisition-related intangible assets and stock-based compensation expenses
0
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Track Record of Growth
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Note: Revenues prior to 2017 do not reflect ASC 606 recast; see company website for recast financial data for 2015-2016
Well-Diversified Revenue Mix
23%Computer
43%Comms
2002 2018
20%Comms
37%Consumer
37%Industrial
6%Computer
Higher-margin industrial & consumer markets now >70% of revenues
24%Consumer
9%Industrial
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Strong Cash Flow
13% 14% 10%
16%
12%
24%
18% 20%
22%
11%
14%
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Cash flow from operations CAPEX FCF (with FCF Margin)$M
One-time tax payment
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FCF = Cash flow from operations less capital expenditures
Cash-rich Business Model
Effective Tax Strategy
Healthy Balance Sheet, Domestic Cash Resources
Accelerated Internal Investment
Targeted M&A
Opportunistic Buybacks
Dividends
Four-Prong Approach to Capital Management
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Strong Balance Sheet
15
20
25
30
35
Q3'08 Q2'11 Q1'14 Q4'16 Q3'19
Diluted Shares Outstanding (M)
At September 30, 2019
$245M cash and investments$175M litigation settlement received in Oct. 2019
No debt
Quarterly dividend of $0.19/share
Share count down 8% since 2008 on stock buybacks
050
100150200250300
Q3'08 Q2'11 Q1'14 Q4'16 Q3'19
Cash and Investments ($M)
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