Power Integrations, Inc.
TWST: Would you give us an overview of what's going on at Power Integrations?
Mr. Balakrishnan: For many years now, we have been leading the way in bringing integration to the power conversion market. Our integrated circuits, ICs, are used mainly in AC/DC power supplies, which convert high-voltage AC from a wall outlet into the low-voltage DC that most electronic products run on. Compared to the discrete designs we replace, we reduce the component count dramatically - eliminating lots of resistors, diodes, transistors, capacitors and so on, which saves labor in both the design and manufacturing stages and also greatly enhances reliability.
The other key benefit we bring is that we dramatically improve energy efficiency - in fact, we've saved almost $5 billion worth of standby power waste since 1998, and we introduced some products last year that can effectively eliminate standby waste for cell-phone chargers and certain other applications. Energy efficiency has been a big driver in our business over the past four years or so as the standards have tightened, and manufacturers have come to see efficiency as a way to differentiate their products.
Historically, we have focused on power supplies with an output of 50 watts and below - that's the power range that we have addressed with our products. That's a multibillion-unit market, covering everything from chargers for cell phones and other mobile devices, to the power supplies embedded in set-top boxes, appliances, LCD monitors, smart utility meters and so on. But in the last year or two, we have expanded our addressable market to much higher wattages. We introduced a bunch of products last year to address applications up to 500 watts based on technologies we have developed over the last decade or so that allow us to offer very compelling products that are cost competitive and bring the same level of integration and energy efficiency to the higher power area. So now we can go into the main power supplies inside things like TVs, game consoles and desktop PCs, devices where we already have a presence in the standby power supply. This expands our addressable market from about $1.5 billion or $1.6 billion to about $2 billion. Last year, we did about $300 million in revenue, which was almost entirely from 50-watts-and-below power range. That's about 20% market share. And now we've expanded it to $2 billion, so we'll be about 15% share now and we have a lot of room to grow.
In addition to that, we have done some investments and M&A transactions. Last December, we purchased a company called Qspeed, which has high-efficiency, high-voltage diodes that we can sell alongside our high-power products. And last fall we invested in a company called SemiSouth Laboratories in Mississippi, which makes silicon-carbide technology, which is different from the silicon technology that we've been doing for a long time. The advantage of silicon carbide is it allows us to expand the market well beyond 500 watts all the way up to 500 kilowatts or even a megawatt, and that could potentially double our addressable market from $2 billion to more like $4 billion. We have a license to that technology as part of the investment, so we can start using it immediately. So we have a road map to address a much larger market with not only the best silicon technology, the best high-voltage diode technology, but now also what we believe is the best commercially available silicon carbide technology offered by SemiSouth.
TWST: As a seasoned veteran in the high-voltage integrated circuit space, what do you believe will be the significant trends, developments or changes in your sector of the market over the next several years?