What changed in this filing

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Item 1. Business

2023-02-07 compared with 2022-02-07 · 50 added, 44 removed, 288 unchanged (25% of the section changed)

19 unchanged sentences

These tools and services include our PI Expert™ design software, which we offer free of charge, and our transformer-sample service.

In 2022 we launched PowerPros ℠ , a live online video support service that enables power-supply designers to talk directly with members of our applications engineering team 24 hours a day, six days a week, anywhere in the world.

Our market-penetration strategy also includes capitalizing on the importance of energy efficiency and renewable energy in the power conversion market.

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Prior to 2010 our addressable market consisted of AC-DC applications with up to about 50 watts of output, a served available market (SAM) opportunity of approximately $1.5 billion.

Since that time we have expanded our SAM to more than $4 billion through a variety of means.

Since that time we have expanded our SAM to approximately $4 billion through a variety of means.

These include the introduction of products that enable us to address higher-power AC-DC applications (such as our Hiper™ product families), the introduction of LED-driver products, and our entry into the gate-driver market through the acquisition of CT-Concept Technologie AG in 2012.

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Less than 5% of the energy consumed by traditional incandescent light bulbs is converted to light, while the remainder is wasted as heat.

The Alliance to Save Energy has estimated that a conversion to efficient lighting technologies such as compact fluorescent bulbs and LEDs could save as much as $18 billion worth of electricity and 158 million tons of carbon dioxide emissions per year in the United States alone.

The Alliance to Save Energy estimated in 2007 that a conversion to efficient lighting technologies such as compact fluorescent bulbs and LEDs could save as much as $18 billion worth of electricity and 158 million tons of carbon dioxide emissions per year in the United States alone.

In response to concerns about the environmental impact of carbon emissions, policymakers have taken action to promote energy efficiency.

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further tightening of the standards is under consideration.

The EISA legislation also required substantial improvements in the efficiency of lighting technologies beginning in 2012;

as of 2014, traditional 100-, 75-, 60- and 40-watt bulbs are no longer permitted to be manufactured or sold in the United States.

Plans to eliminate conventional incandescent bulbs have also been announced or enacted in other geographies such as Canada, Australia and Europe.

In December 2019 the government of China published new efficiency standards for room air conditioners, which took effect on July 1, 2020.

The EISA legislation also required substantial improvements in the efficiency of lighting technologies;

the manufacture and sale of most incandescent bulbs has been illegal in the United States since 2014, while rules adopted in 2022 by the U.S.

government are expected to result in the phase-out of additional categories of inefficient bulbs.

Plans to eliminate incandescent bulbs have also been announced or enacted in other geographies such as Canada, Australia and Europe.

In December 2019 the government of China published new efficiency standards for room air conditioners, which took effect in July 2020.

In 2022 India’s Bureau of Energy Efficiency implemented new labeling standards for ceiling fans in an effort to drive adoption of BLDC motors in place of less efficient induction motors.

We believe we offer products that enable manufacturers to meet or exceed these regulations, and all other such regulations of which we are aware.

Since 1998, our AC-DC power-conversion ICs have featured our EcoSmart technology which drastically reduces standby power waste.

We have sold more than 18 billion ICs featuring EcoSmart technology, resulting in estimated savings of more than $15 billion worth of standby power worldwide.

We have sold more than 20 billion ICs featuring EcoSmart technology, resulting in estimated savings of more than 160 billion kilowatt-hours of standby power worldwide.

In 2010 we expanded our portfolio of energy-saving products with the introduction of our CapZero and SenZero IC families, which eliminate additional sources of standby waste in some power supplies.

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This portfolio of power-conversion products generally addresses power supplies ranging from less than one watt of output up to approximately 500 watts of output, a market we refer to as the “low-power” market.

This market consists of an extremely broad range of applications including mobile-device chargers, consumer appliances, utility meters, LCD

monitors, main and standby power supplies for desktop computers and TVs, and numerous other consumer and industrial applications, as well as LED lighting.

This market consists

of an extremely broad range of applications including mobile-device chargers, consumer appliances, utility meters, LCD monitors, main and standby power supplies for desktop computers and TVs, and numerous other consumer and industrial applications, as well as LED lighting.

We also now offer automotive-qualified versions of certain products, such as InnoSwitch ICs, for use in electric vehicles.

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Such applications include refrigerator compressors, ceiling fans, air purifiers as well as pumps, fans and blowers used in consumer appliances such as dishwashers and laundry machines.

BridgeSwitch products are complemented by our Motor-Expert software, which provides configuration and diagnostic tools for design engineers.

Other Product Information

TOPSwitch, TinySwitch, LinkSwitch, DPA-Switch, EcoSmart, Hiper, Qspeed, InnoSwitch, BridgeSwitch, SCALE, SCALE-II, SCALE-III, SCALE-iDriver, PeakSwitch, CAPZero, SENZero, ChiPhy, FluxLink, CONCEPT and PI Expert are trademarks of Power Integrations, Inc.

TOPSwitch, TinySwitch, LinkSwitch, DPA-Switch, EcoSmart, Hiper, Qspeed, InnoSwitch, BridgeSwitch, SCALE, SCALE-II, SCALE-III, SCALE-iDriver, PeakSwitch, CAPZero, SENZero, ChiPhy, FluxLink, CONCEPT, PI Expert and Motor-Expert are trademarks of Power Integrations, Inc.

End Markets and Applications

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Desktop PCs and monitors, servers, adapters for tablets and notebook computers, other computer peripherals

Major and small appliances, air conditioners, TV set-top boxes, digital cameras, TVs, video-game consoles

Industrial controls, LED lighting, utility meters, motor controls, uninterruptible power supplies, battery-powered tools, networked thermostats, power strips and other “smart home” devices, industrial motor drives, renewable energy systems, electric locomotives, electric buses and other electric vehicles, high-voltage DC transmission systems

Major and small appliances, air conditioners and other comfort appliances, TVs and set-top boxes, video-game consoles

Industrial controls, LED lighting, utility meters, motor controls, uninterruptible power supplies, battery-powered tools, networked thermostats, power strips and other “smart home” devices, industrial motor drives, renewable energy systems, electric locomotives, electric passenger cars and commercial vehicles, high-voltage DC transmission systems

Sales, Distribution and Marketing

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In 2022, 2021, and 2020 two customers, both distributors, each accounted for more than 10% of revenues.

In 2019, one of these distributors accounted for more than 10% of revenues.

Research and Development

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As of December 31, 2022, we held 343 U.S.

patents and 341 foreign patents.

and 329 foreign patents.

and foreign patents have expiration dates ranging from 2023 to 2042.

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We utilize both proprietary and standard IC packages for assembly.

Some of the materials used in our packages and certain aspects of the assembly process are specific

to our products.

We require our assembly manufacturers to use high-voltage molding compounds which are more difficult to process than industry standard molding compounds.

Some of the materials used in our packages and certain aspects of the assembly process are specific to our products.

We require our assembly manufacturers to use high-voltage molding compounds which are more difficult

to process than industry standard molding compounds.

We work closely with our contractors on a continuous basis to maintain and improve our manufacturing processes.

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We try to carry a substantial amount of wafer and finished-goods inventory to help offset these risks and to better serve our markets and meet customer demand.

Competing alternatives to our high-voltage ICs for the power-supply market include monolithic and hybrid ICs from companies such as ON Semiconductor, STMicroelectronics, Infineon, and Sanken Electric Company, as well as PWM-controller chips paired with discrete high-voltage transistors;

such controller chips are produced by a large number of vendors, including those listed above as well as such companies as NXP Semiconductors, Diodes Inc., On-Bright Electronics and Renesas Electronics.

Self-oscillating switchers, built with discrete components supplied by numerous vendors, are also commonly used.

For some applications, line-frequency transformers are also a competing alternative to designs utilizing our products.

Our gate-driver products compete with alternatives from such companies as Avago, Infineon and Semikron, as well as driver circuits made up of discrete devices.

Our motor-driver ICs compete with alternatives from such companies as ON Semiconductor, Infineon, STMicroelectronics and Sanken Electric Company.

Competing alternatives to our high-voltage ICs for the power-supply market include monolithic and hybrid ICs from companies such as STMicroelectronics, Infineon Technologies and Sanken Electric Company, as well as PWM-controller chips paired with discrete high-voltage silicon or GaN transistors;

Our gate-driver products compete with alternatives from such companies as Broadcom, Infineon, Mitsubishi Electric, Fuji Electric, Semikron and Hangzhou Firstack Technology Co., as well as driver circuits made up of discrete devices.

Our motor-driver ICs compete with power modules from such companies as ON Semiconductor, Infineon, STMicroelectronics, Mitsubishi and Sanken as well as discrete designs from a wide range of other suppliers.

Generally, our products enable customers to design power converters with total bill-of-materials costs similar to those of competing alternatives.

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This support includes hands-on design assistance as well as a range of design tools and documentation such as software and reference designs.

We also believe that our record of

product quality and history of delivering products to our customers on a timely basis serve as additional competitive advantages.

We also believe that our record of product quality and history of delivering products to our customers on a timely basis serve as additional competitive advantages.

We generally warrant that our products will substantially conform to the published specifications for 12 months from the date of shipment.

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Human Capital

As of December 31, 2021, we employed 773 full-time personnel across 14 countries with 361, or 47% of the total, residing in North America, while 53% resided offshore comprising 297 in the Asia-Pacific region and 115 across Europe, Middle East and Africa.

As of December 31, 2022, we employed 831 full-time personnel across 14 countries with 370, or 45% of the total, residing in North America, while 55% resided offshore comprising 334 in the Asia-Pacific region and 127 across Europe.

As of December 31, 2022, 6% of our worldwide employees were foreign nationals, defined as individuals requiring employment visas in the countries where they are employed.

Women comprise approximately 36% of our U.S.

non-technical workforce and 26% of our U.S.

Women comprise approximately 26% of our total U.S.

workforce and 33% of our non-technical U.S.

The ethnic makeup of our U.S.

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Innovation is the lifeblood of our company, and we depend on our people to sustain our competitive advantage.

We offer attractive compensation with generous comprehensive benefits for employees and dependents (including domestic partners), including health, dental and vision insurance, matching 401(k) contributions, employee stock plans, paid time off and family leave, life insurance, flu vaccinations, charitable gift matching, a health-and-wellness program designed to promote physical well-being, and an employee assistance program and other mental health services.

To attract and retain talented employees, we offer competitive compensation with generous comprehensive benefits for employees and dependents (including domestic partners).

We offer health, dental and vision insurance, covering 86% of the cost of employee health insurance in 2022, flexible spending accounts for healthcare and child-care expenses, matching 401(k) contributions (at a rate of 50% of the employee contribution, up to a maximum of 4% of the employee’s eligible compensation), employee stock plans, paid vacation and family leave, life and disability insurance, flu vaccinations, tuition reimbursement, charitable gift matching, health-and-wellness programs designed to promote physical well-being and other mental health services.

Approximately 99% of eligible U.S.

employees participate in our 401(k) plan.

These benefits, combined with our culture of innovation and sustainable growth, contribute to low employee turnover and an average tenure of nearly 10 years.

employees participate in our 401(k) plan, and 68% of eligible employees participated in the most recent offering period of our employee stock purchase plan.

These benefits, combined with our culture of innovation and sustainable growth, contribute to below-average employee turnover relative to our industry and an average tenure of nearly 7 years.

In December 2022 we were certified by Great Place to Work® based on the results of an anonymous survey of employees, in which 82% of employees stated that Power Integrations is a great place to work.

It is our policy to ensure equal employment opportunity for all applicants and employees without regard to prohibited considerations of race, color, religion, sex (including pregnancy, gender identity and sexual orientation), national origin, age, disability or genetic information, marital status or any other classification protected by applicable local, state or federal laws.

3 unchanged sentences

We offer tuition reimbursement for job-related education and provide live and online classes covering topics such as communication, leadership and management, software, and time management.

Subject to restrictions due to the current COVID-19 pandemic, we also offer catered lunch-time workshops on a range of personal-development topics such as financial planning, nutrition and stress management.

We also offer catered lunch-time workshops on a range of personal-development topics such as financial planning, nutrition and stress management.

Additional information regarding our commitment to our people can be found on our website at https://www.power.com/company/sustainability-citizenship/.

Investor Information

We make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing this material electronically or otherwise furnishing it to the SEC.

We make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act as soon as reasonably practicable after filing this material electronically or otherwise furnishing it to the SEC.

Investors may obtain free electronic copies or request paper copies of these reports via the “For Investors” section of our website, www.power.com .

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Our corporate governance guidelines, the charters of our board committees, and our code of business conduct and ethics, including ethics provisions that apply to our principal executive officer, principal financial officer, controller and senior financial officers, are also available via the investor website listed above.

These items are also available in print to any stockholder who requests them by calling (408) 414-9200.

We intend to satisfy the disclosure requirements of Form 8-K regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies

to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on our investor website listed above.

These items are also available in print to

any stockholder who requests them by calling (408) 414-9200.

We intend to satisfy the disclosure requirements of Form 8-K regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on our investor website listed above.

Power Integrations, Inc.

1 unchanged sentence

Information About Our Executive Officers

As of February 1, 2022, our executive officers, who are appointed by and serve at the discretion of the board of directors, were as follows:

As of January 31, 2023, our executive officers, who were appointed by and serve at the discretion of our board of directors, were as follows:

Position With Power Integrations

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Vice President, Corporate Development

(1) On February 6, 2023, Mr.

Matthews assumed a new role as Chief Technology Officer.

See Part I, Item 9B in this Annual Report on Form 10-K.

Balu Balakrishnan has served as president and chief executive officer and as a director of Power Integrations since January 2002.

14 unchanged sentences

Previously, he served in a succession of engineering-management and technology development roles at Phaethon Communications, Inc., a photonics technology company, Cirrus Logic, Inc., a high-precision analog and digital signal processing company, Advanced Micro Devices, a semiconductor company, Cypress Semiconductor, Inc., a semiconductor company and Microelectronica a semiconductor company.

Barsan has 40 years of commercial experience in semiconductor and photonic components development, engineering and operations.

Barsan has more than 40 years of commercial experience in semiconductor and photonic components development, engineering and operations.

Sunil Gupta has served as our vice president of operations since August 2020.

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Prior to joining Intersil, Mr.

Gupta was the Director of Worldwide Customer Quality Engineering at Qualcomm, and prior to Qualcomm Mr.

Gupta was the Director of Worldwide Customer Quality

Engineering at Qualcomm, and prior to Qualcomm Mr.

Gupta spent 16 years at National Semiconductor in wafer fab operations and quality.

1 unchanged sentence

Matthews joined Power Integrations in 1992, managing our European application engineering group and then our European sales organization as managing director of Power Integrations (Europe).

He has led our product-definition team since 2000,

serving as director of strategic marketing prior to assuming his current role.

He has led our product-definition team since 2000, serving as director of strategic marketing prior to assuming his current role.

Prior to joining Power Integrations, Mr.

1 unchanged sentence

Sandeep Nayyar has served as our vice president and chief financial officer since June 2010.

From 2002 to 2009 Mr.

Nayyar served as vice president of finance at Applied Biosystems, Inc., a developer and manufacturer of life-sciences products, where he was a member of the executive team with world-wide responsibilities for finance.

Previously Mr.

Nayyar served as vice president of finance at Applied Biosystems, Inc., a developer and manufacturer of life-sciences products, from 2002 to 2009.

Nayyar was a member of the executive team with world-wide responsibilities for finance.

From 1990 to 2001, Mr.

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Nayyar has served as a director and audit-committee chairman of Smart Global Holdings, Inc., a manufacturer of specialty memory solutions;

in 2021 he was named lead independent director.

and was the lead independent director from 2021 to 2022.

Yang Chiah Yee has served as our vice president, worldwide sales since June 2021.

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business