Power Integrations, Inc. Nasdaq: POWI. March 2017

Transcription

1 Power Integrations, Inc. Nasdaq: POWI March 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 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, 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 IGBT drivers for high-power applications 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 The Power Integrations Advantage EMI filter and bridge rectifier Isolation transformer Synchronous rectification Output current and voltage control Switching MOSFET and current sense Opto-coupler feedback Conventional Phone Charger -More than 60 Components 2017 Power Integrations 6

7 The Power Integrations Advantage InnoSwitch Switching MOSFET Current sense FluxLink replaces opto-coupler Synchronous rectification driver Output current and voltage control Phone-charger Power Supply Using InnoSwitch-CH only 24 parts 2017 Power Integrations 7

8 Radically Simplifying Power Supplies HiperPFS, HiperLCS / HiperTFS ICs replace up to 100 components HiperPFS, HiperLCS/ HiperTFS 2017 Power Integrations 8

9 Power Everywhere A Vast Addressable Market 2017 Power Integrations 9

10 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 10

11 Long-Term Secular Growth Drivers Ongoing transition to IC-based power supplies Integration saves labor and materials, improves reliability 2017 Power Integrations 11

12 Leading Transition to IC-Based Power Supplies Power Supply Unit Volume Sanken ST Micro ON Semi Infineon POWI Discretes Linear Transformers Infineon ON Semi ST Micro NXP Dialog Integrated Diodes Richtek Leadtrend OnBright Others Today 2017 Power Integrations 12

13 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 13

14 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 14

15 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 15

16 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 16

17 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 17

18 Energy Vampire vs. LinkZero 2017 Power Integrations 18

19 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 LED lighting Home & building automation / smart appliances / IoT Battery-powered tools, e-bikes, electric transportation High-power business adds $1B to SAM 2017 Power Integrations 19

20 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 20

21 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 21

22 Increasing IoTFootprint Connected Power Strips / U Sockets Connected smoke alarms, occupancy sensors, smart lighting 2017 Power Integrations 22

23 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 23

24 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 24

25 SCALE-iDriver with 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 25

26 SCALE-iDriverApplications: KW Motor Drives UPS Medical Welding / Cutting Solar Commercial Vehicles 2017 Power Integrations 26

27 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 27

28 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 28

29 Target Financial Model Double-digit revenue growth 13% 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 Note: Non-GAAP results exclude amortization of acquisition-related intangible assets and stock-based compensation expenses 2017 Power Integrations 29

30 Track Record of Growth Revenues ($M) Note: Revenues shown in chart are prior to ASC 606 recast; see company website for recast financial data for Power Integrations 30

31 Recent Results A Return to Growth 13% top-line growth in % year/year growth in Q4 20% 15% ~30% growth in communications end market in 2016 Driven by InnoSwitch adoption for rapid charging Consumer revenues up double digits in 2016, industrial up midsingle-digits Y/Y Revenue Growth 10% 5% 0% -5% -10% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4' Power Integrations 31

32 Well-Diversified Revenue Mix % Industrial 23% Computer 24% Consumer 43% Comms 31% Industrial 36% Consumer 27% Comms 6% Computer Higher-margin industrial & consumer markets now ~2/3 of revenues 2017 Power Integrations 32

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

34 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 34

35 Strong Balance Sheet At December 31, 2016 $250M cash and investments Used $116M for Concept acquisition Repurchased >$330M of stock since 2008 No debt Quarterly dividend of $0.14/share Share count down 8% since 2008 Cash and Investments ($M) Q3'08 Q2'11 Q1'14 Q4'16 Diluted Shares Outstanding (M) Q3'08 Q2'11 Q1'14 Q4' Power Integrations 35

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