Power Integrations, Inc. Nasdaq: POWI. January 2017

Transcription

1 Power Integrations, Inc. Nasdaq: POWI January 2017

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, (see Historical Financials data file) Power Integrations 2

3 Secular Growth Story in Analog Semis Leading innovator in high-voltage power conversion Clean-tech enabler Efficient appliances, LED lighting Industrial DC motor drives Renewable energy Electric transportation Expanding market opportunity Rapid charging for mobile devices Connected appliances / smart-home / IoT Battery-driven tools, e-bikes 2017 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 2017 Power Integrations 4

5 Highly Integrated Power Converters Replacing Legacy Technologies 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 Power Integrations 5

6 Power Everywhere A Vast Addressable Market 2017 Power Integrations 6

7 Addressable Market Now Exceeds $3B 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 Desktop/server standby Desktop main Notebook adapters LCD monitors Printers Computer Industrial Consumer Comms 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 High-power applications in red 2017 Power Integrations 7

8 Long-Term Secular Growth Drivers Ongoing transition to IC-based power supplies Integration saves labor and materials, improves reliability 2017 Power Integrations 8

9 Leading Transition to IC-Based Power Supplies Power Supply Unit Volume Fairchild Sanken ST Micro ON Semi Infineon POWI Discretes Linear Transformers Fairchild Infineon ON Semi ST Micro NXP Integrated iwatt/dialog BCD/Diodes Richtek Leadtrend OnBright Today 2017 Power Integrations 9

10 InnoSwitch : A New Level of Integration First IC to integrate primary and secondary sides of power supply across safety barrier Enabled by FluxLink technology Enables drastic reduction in component count, complexity Highly energy-efficient Very high efficiency Very low standby consumption Primary Secondary 2017 Power Integrations 10

11 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 11

12 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 12

13 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 Power Integrations 13

14 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 14

15 Energy Vampire vs. LinkZero 2017 Power Integrations 15

16 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 Expanding market opportunity Rapid charging for mobile-device market Battery-powered tools, e-bikes, electric transportation Home & building automation / smart appliances / IoT Expanding range of addressable applications with new products 2017 Power Integrations 16

17 Rapid Charging Emerging 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 Conventional Charging With PI chipset 2017 Power Integrations 17

18 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 18

19 Radically Simplifying Power Supplies for PCs, TVs HiperPFS, HiperLCS / HiperTFS ICs replace up to 100 components HiperPFS, HiperLCS/ HiperTFS 2017 Power Integrations 19

20 More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage Boost Inductor AC EMI Filter Gate Drive Main & Standby Controller Main Output SR Standby Output PFC Controller TNY Before: Single IC for standby power supply 2017 Power Integrations 20

21 More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage Boost Inductor QSpeed HiperTFS AC CpZ EMI Filter SnZ Gate Drive Main & Standby Controller Main Output SR Standby Output PFC Controller HiperPFS CapZero HiperPFS SenZero Qspeed HiperTFS main + standby Now: Up to five components, potential dollar content >5x higher 2017 Power Integrations 21

22 IGBT Drivers for High-Power Market Acquired CT-Concept in 2012 Addressing applications 10 kw to 1 GW High-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 2017 Power Integrations 22

23 Serving the Clean-Power Ecosystem Energy Ecosystem End Markets Energy Generation Wind Turbines Solar Power Power Semiconductors Energy Transmission HVDC Transmission Driver IGBT Module Energy Consumption Motor Control HEV/EV Locomotive Medical Driver optimizes efficiency, operating performance and lifespan High-voltage switches arranged to increase power capability 2017 Power Integrations 23

24 SCALE-iDriver with Integrated FluxLink Introduced May 2016; key synergy of Concept acquisition FluxLink provides isolation without optocouplers Adds ~$500M to addressable market Secondary (low-voltage) Input (PWM) IGBT1 Fault Primary (high-voltage) IGBT Power Integrations 24

25 SCALE-iDriverApplications: KW Motor Drives UPS Medical Welding / Cutting Solar Commercial Vehicles 2017 Power Integrations 25

26 Expanded Power Range = Larger SAM AC/DC LED IGBT Hiper Family CAPZero /SENZero Qspeed SCALE-iDriver + SCALE -2 TOPSwitch TinySwitch LinkSwitch / InnoSwitch LED Driver Products LYTSwitch 0W 2W 5W 20W 50W 100W 200W 500W 10 kw 100 kw 1 GW 2017 Power Integrations 26

27 Worldwide Field Support and Operations Headquartered in San José, California Design centers in San José, Ottawa, Switzerland, UK 16 field labs worldwide, each with in-house EMI test capability PI Locations Wafer Foundry (Lapis, EPSON, X-FAB) Assembly Subcontractor 2017 Power Integrations 27

28 Target Financial Model Double-digit revenue growth 12% growth through first three quarters of 2016 Non-GAAP gross margin 50-55% Non-GAAP operating margin 20%+ Non-GAAP tax rate ~5% Note: Non-GAAP results exclude amortization of acquisition-related intangible assets and stock-based compensation expenses 2017 Power Integrations 28

29 Track Record of Growth Revenues ($M) Power Integrations 29

30 Recent Results A Return to Growth 17% Y/Y top-line growth in Q3 12% growth through first three quarters 20% 15% >20% growth in communications end market in Q3 Driven by InnoSwitch adoption for rapid charging Consumer up 20%, industrial up mid-teens in Q3 Y/Y Revenue Growth 10% 5% 0% -5% -10% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3' Power Integrations 30

31 Well-Diversified Revenue Mix (9 months) 9% Industrial 23% Computer 24% Consumer 43% Comms 31% Industrial 37% Consumer 26% Comms 6% Computer Higher-margin industrial & consumer markets now over 2/3 of revenues 2017 Power Integrations 31

32 Strong Cash Flow: 15% FCF CAGR ( ) $M Cash flow from operations CAPEX FCF (with FCF Margin) 13% 14% 10% One-time tax payment 16% 12% 24% 18% 20% FCF = Cash flow from operations less capital expenditures 2017 Power Integrations 32

33 Four-Prong Approach to Capital Management Accelerated Internal Investment Cash-rich Business Model Effective Tax Strategy Healthy Balance Sheet, Domestic Cash Resources Targeted M&A Opportunistic Buybacks Dividends 2017 Power Integrations 33

34 Strong Balance Sheet At September 30, 2016 $227M cash and investments Used $116M for Concept acquisition Repurchased >$330M of stock since 2008 No debt Quarterly dividend of $0.13/share Diluted share count down 9% since 2008 on share repurchases Cash and Investments ($M) Q3'08 Q3'10 Q3'12 Q3'14 Q3'16 Diluted Shares Outstanding (M) Q3'08 Q3'10 Q3'12 Q3'14 Q3' Power Integrations 34

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