Post on 10-Jan-2020
Power Integrations, Inc.Nasdaq: POWI
August 2017
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 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.
©2017 Power Integrations | www.power.com 2
Secular Growth Story in Analog Semis
Leading innovator in high-voltage power conversion
Clean-tech enablerEfficient appliances, LED lighting
Industrial DC motor drives
Renewable energy
Electric transportation
Expanding market opportunityRapid charging for mobile devices
Connected appliances / smart-home / IoT
Battery-driven tools, e-bikes
IGBT drivers for high-power applications
©2017 Power Integrations | www.power.com 3
Comprehensive Expertise in High-Voltage
©2017 Power Integrations | www.power.com 4
Ultra-simple power converters
Fewer components
Shorter design cycles
Easier to manufacture
Higher reliability
BOM cost similar to discrete
designs
Highly energy-efficient
Discrete power supply: 70 components
Equivalent power supply with POWI:
36 components, smaller board
Linear transformer:
weighs 12 oz.Adapter with POWI:
weighs 2 oz.
Highly Integrated Power Converters
Replacing Legacy Technologies
©2017 Power Integrations | www.power.com 5
The Power Integrations Advantage
6©2017 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©2017 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
Radically Simplifying Power Supplies
HiperPFS™, HiperLCS™ / HiperTFS™ ICs replace up to 100 components
©2017 Power Integrations | www.power.com 8
HiperPFS , HiperLCS / HiperTFS
Power Everywhere – A Vast Addressable Market
©2017 Power Integrations | www.power.com 9
Addressable Market Now Exceeds $3B
Consumer
CommsComputer
Industrial
High-power applications in red
● Desktop/server standby
● Desktop main
● Notebook 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
©2017 Power Integrations | www.power.com 10
Long-Term Secular Growth Drivers
Ongoing transition to IC-based power supplies
Integration saves labor and materials, improves reliability
©2017 Power Integrations | www.power.com 11
Leading Transition to IC-Based Power Supplies
Linear Transformers
1970 1994
Discretes
1994 Today1970
Integrated
POWI
• Diodes• Richtek• Leadtrend• OnBright• Others
• Infineon• ON Semi• ST Micro• NXP• Dialog
Po
we
r S
up
ply
Un
it V
olu
me
Sanken
ST Micro
ON Semi
Infineon
©2017 Power Integrations | www.power.com 12
InnoSwitch™: A New Level of Integration
First IC to integrate primary and
secondary sides of power supply across
safety barrierEnabled by FluxLink™ technology
Enables drastic reduction in
component count, complexity
Highly energy-efficientVery high efficiency
Very low standby consumption
©2017 Power Integrations | www.power.com 13
SecondaryPrimary
Long-Term Secular Growth Drivers
Ongoing transition to IC-based power supplies
Integration saves labor and materials, improves reliability
Energy-efficient electronics & appliances
Driven by standards and consumer awareness
©2017 Power Integrations | www.power.com 14
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
©2017 Power Integrations | www.power.com 15
Energy Specs Continue to Tighten
U.S. Dept. of Energy tightened federal standards
for external power supplies effective 2016
ENERGY STAR® “Most Efficient” label rewards top
performers
SEAD competition recognizes most efficient TVs
European standby power limitation tightened to
0.5 W in 2013
Traditional incandescent bulbs banned in U.S.
©2017 Power Integrations | www.power.com 16
“Zero” Series Eliminates Waste
LinkZero™ 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
©2017 Power Integrations | www.power.com 17
Energy Vampire vs. LinkZero™
©2017 Power Integrations | www.power.com 18
Long-Term Secular Growth Drivers
Ongoing transition to IC-based power suppliesIntegration saves labor and materials, improves reliability
Energy-efficient electronics & appliancesDriven by standards and consumer awareness
Expanding market opportunity – SAM has doubled since 2010Rapid charging for mobile-device market
LED lighting
Home & building automation / smart appliances / IoT
Battery-powered tools, e-bikes, electric transportation
SCALE-iDriver™ doubles SAM for high-power business to $1B
©2017 Power Integrations | www.power.com 19
Rapid Charging – Important Trend in Mobility
More power needed to charge bigger batteries faster
Demands ICs with high integration and maximum efficiency
InnoSwitch™ + ChiPhy™ Interface Chip = More POWI content
©2017 Power Integrations | www.power.com 20
Conventional
Charging
With PI chipset
Well-Positioned in LED Lighting
Traditional light sources phasing out
LEDs need efficient, reliable AC-DC drivers
Integration brings reliability, efficiency, size advantage
LYTSwitch™ products offer highest level of integration available
©2017 Power Integrations | www.power.com 21
Increasing IoT Footprint
©2017 Power Integrations | www.power.com 22
Connected Power Strips / U Sockets
Connected smoke alarms, occupancy sensors, smart lighting
©2017 Power Integrations | www.power.com 23
IGBT Drivers for High-Power Market
Acquired CT-Concept in 2012
Addressing applications 10 kW to 1 GWHigh-efficiency industrial motors, renewable
energy, electric transportation, DC transmission
New SCALE-iDriver™ broadens the
addressable market from ~$500M to ~ $1B
High-power now ~10% of POWI revenues
SCALE™ drivers reduce component count, enhance efficiency, reliability
Serving the Clean-Power Ecosystem
Power Semiconductors
High-voltage switches
arranged to increase
power capability
Driver optimizes
efficiency, operating
performance
and lifespan
©2017 Power Integrations | www.power.com 24
Energy Ecosystem End Markets
Energy
Generation
Energy
Transmission
Energy
Consumption
Wind Turbines
Solar Power
HVDC
Transmission
Motor ControlHEV/EV
LocomotiveMedical
IGBT ModuleDriver
©2017 Power Integrations | www.power.com 25
SCALE-iDriver™ with FluxLink™
Introduced May 2016; key
synergy of Concept acquisition
FluxLink provides isolation
without optocouplers
Adds ~$500M to addressable
market
IGBT1
IGBT2
Input (PWM)
Fault
Primary
(high-voltage)
Secondary
(low-voltage)
SCALE-iDriver Applications: 10-100 KW
©2017 Power Integrations | www.power.com 26
Solar
Motor Drives MedicalUPS
Welding / Cutting Commercial Vehicles
Expanded Power Range = Larger SAM
0W 500W5W 50W2W 20W 200W
TOPSwitch™
TinySwitch™
LinkSwitch™ / InnoSwitch™
LED Driver Products – LYTSwitch™
©2017 Power Integrations | www.power.com 27
AC/DC
LED
IGBT
10 kW 100 kW 1 GW100W
Hiper™ Family
CAPZero™ / SENZero™
Qspeed
SCALE-iDriver™+ SCALE™-2
�
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Worldwide Field Support and Operations
Headquarters in San José, California
Design centers in Canada, Switzerland, UK
16 field labs worldwide, each with in-house EMI test capability
©2017 Power Integrations | www.power.com 28
���� Assembly Subcontractor
� Wafer Foundry (Lapis, EPSON, X-FAB)
PI Locations
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Target Financial Model
Double-digit revenue growth13% growth in 2016
Non-GAAP gross margin 50-55% 50.6% in 2016
Non-GAAP operating margin 20%+19.3% in 2016
Non-GAAP tax rate ~5%3.4% in 2016
©2017 Power Integrations | www.power.com 29
Note: Non-GAAP results exclude amortization of acquisition-related intangible assets and stock-based compensation expenses
0
50
100
150
200
250
300
350
400
2001 2006 2011 2016
Re
ven
ue
s ($
M)
©2017 Power Integrations | www.power.com
Track Record of Growth
30
Note: Revenues shown in chart are prior to ASC 606 recast; see company website for recast financial data for 2015-2016
-10%
-5%
0%
5%
10%
15%
20%
Q1'15 Q4'15 Q3'16 Q2'17
Y/Y
Re
ve
nu
e G
row
th
©2017 Power Integrations | www.power.com
Recent Results
13% revenue growth in 2016~30% growth in communications end
market - driven by rapid charging
Consumer revenues up double digits in
2016, industrial up mid-single-digits
14% growth in 1H 2017Double-digit growth in comms, consumer,
industrial markets
31
Q1’17 reflects adoption of ASC 606; all other data points are as originally reported
Well-Diversified Revenue Mix
23%Computer
43%Comms
2002 2016
27%
Comms
36%
Consumer
31%
Industrial
6%
Computer
Higher-margin industrial & consumer markets now ~2/3 of revenues
24%Consumer
9%Industrial
©2017 Power Integrations | www.power.com 32
Strong Cash Flow: 15% FCF CAGR (2008-2016)
13% 14% 10%
16%
12%
24%
18% 20%
22%
0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012 2013 2014 2015 2016
Cash flow from operations CAPEX FCF (with FCF Margin)$M
One-time tax
payment
©2017 Power Integrations | www.power.com 33
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
©2017 Power Integrations | www.power.com 34
Strong Balance Sheet
10
15
20
25
30
35
Q3'08 Q2'10 Q1'12 Q4'13 Q3'15 Q2'17
Diluted Shares Outstanding (M)
At June 30, 2017
$254M cash and investments
Used $116M for Concept acquisition
Repurchased >$330M of stock since 2008
No debt
Quarterly dividend of $0.14/share
Share count down 6% since 2008
0
50
100
150
200
250
Q3'08 Q2'10 Q1'12 Q4'13 Q3'15 Q2'17
Cash and Investments ($M)
©2017 Power Integrations | www.power.com 35