Power Integrations (POWI) Stifel 2024 Cross Sector Insight Conference summary

Industry context and company positioning

• Operates in high-voltage semiconductors, focusing on energy efficiency and renewables, which are expected to drive the majority of global carbon reduction investments over the next 20 years.

• Sees downturns as opportunities to invest in talent and R&D, gaining market share while competitors retract.

• Maintains strong supplier relationships and invests in employee retention, resulting in low turnover and readiness for recovery.

• Shifted R&D focus from silicon carbide to GaN, which is now central to new product development and future growth.

Market trends and segment outlook

• Communications segment is expected to decline due to market maturity, reduced phone charger attachment rates, and out-of-the-box trends.

• Growth anticipated in computers, consumer, and industrial segments, with inventory normalization supporting a positive outlook for the second half of the year.

• Automotive and data center markets are emerging as future growth drivers, with automotive potentially becoming a significant revenue contributor by 2028-2029.

• Computer segment is projected to increase its revenue share, while cell phone revenue share will decline over the next few years.

Technology and product strategy

• GaN technology is expected to replace silicon in high-voltage applications, with new products targeting computers, industrial, and consumer markets.

• GaN enables higher power, smaller chargers, and is essential for next-generation notebooks and monitors.

• Recent acquisition accelerates GaN development, especially for higher power levels to compete with silicon carbide in automotive and data center applications.

• Focus on cost-effective GaN solutions to ensure competitiveness across markets, leveraging in-house expertise and a new experimental facility.