Power Integrations is a Silicon Valley-based supplier of high-performance components used in high-voltage power conversion
Could you explain the core competence of Power Integrations?
We specialize in high-voltage semiconductor products. Typical wall outlets deliver about 110 or 240 volts, but our products work with voltages starting from 700 volts and extend to much higher levels. Our expertise lies in converting power from the wall outlet or grid into usable energy, powering everyday appliances like refrigerators and washing machines. Although the power supply is usually hidden inside these appliances, you can directly see it in devices like cell phone chargers. Our GaN (gallium nitride) technology allows for smaller, more efficient power supplies, such as those used in notebook chargers. Our focus is on energy efficiency, covering everything from low-power applications like cell phones to high-power applications, such as high-voltage DC transmission systems that operate at gigawatt levels. We address the full spectrum of power generation and usage, including renewable energy and transmission systems, with energy efficiency being a major contributor to reducing carbon emissions.
What makes Power Integrations' GaN technology unique compared to others in the industry?
Our GaN technology is entirely proprietary, setting us apart from companies that rely on technology from foundries, which is available to anyone. This allows us superior control over performance, cost, and reliability. Our leadership in GaN technology dates back to 2018, when we first shipped GaN products in high volume, although it wasn't widely recognized until 2019.
We focus on delivering solutions rather than showcasing the technology itself, maintaining a competitive edge. GaN has the potential to surpass silicon and silicon carbide, especially at higher power levels where it offers significant advantages in efficiency and cost.
What opportunities and challenges do you see for Power Integrations in the current market?
This is a pivotal moment with global trends like electrification, sustainability, and AI driving growth. Back in 1998, we introduced TinySwitch, a product that reduced standby power consumption significantly, but the market wasn’t ready for it then. Now, energy efficiency is a priority, aligning with our capabilities. We anticipate a significant investment in achieving net-zero carbon emissions, with a major portion focused on energy efficiency and renewables. Even capturing a small share of this investment could significantly boost our growth. While entering markets like automotive and large infrastructure projects takes time, the next decade looks promising for us, especially with our GaN technology.
What concerns do you have about competition and protecting your technology?
Protecting our intellectual property has been a priority. We made a strategic decision in the early '90s to keep our core IP out of countries where there was a high risk of leakage. Our manufacturing is largely based in Japan, with some operations in the U.S., especially for GaN-related work. The technology remains exclusive to us, giving us control and reducing risks. This strategy has enabled us to maintain production even during disruptions like the COVID-19 pandemic. Our diversified supply chain, with nine different fabs in Japan, ensures resilience and stability in our operations.
How does GaN technology differ across various applications, from consumer electronics to large-scale energy systems?
While the core principles of GaN remain consistent, its applications vary significantly between low- and high-power products. For example, a data center powered by a nuclear reactor may need efficient energy transmission over long distances—this is where our high-power products come in. GaN is crucial in applications like AI data centers, where traditional silicon power supplies struggle to handle high energy demands. GaN offers improved efficiency and smaller designs, making it ideal for these scenarios. We focus on providing complete solutions that solve system-level challenges, which differentiates us from companies that sell discrete components.
What steps are you taking to accelerate the development of high-power GaN technology?
We recently acquired Odyssey Semiconductor to speed up our high-power GaN development. This acquisition wasn’t about revenue but rather gaining access to their fabrication capabilities and expertise, allowing us to accelerate R&D cycles. Our goal is to extend GaN technology beyond 1,250 volts and tens of kilowatts of power, targeting power levels in the hundreds of kilowatts to compete directly with silicon carbide. With continued investment, we expect significant breakthroughs within the next three to five years, opening new opportunities in markets like automotive drivetrains and industrial.
What keeps you up at night as you look ahead?
Our biggest challenge is having too many promising opportunities but not enough resources to pursue them all. For example, the data center market presents a huge opportunity, and we could accelerate progress with more investment. We’re also advancing in GaN technology, but we could move faster if we had more funding. Being a public company means balancing R&D investment with revenue. While the potential is enormous, especially in automotive and data centers, it takes time and resources to bring these products to market. Despite challenges like the slowdown in China, we see a positive future with new products and markets that can drive significant growth.
