Power Integrations Announces Settlement of Its Patent Infringement Lawsuit With Motorola and Comments on a Revenue Shortfall for the Quarter

March 23, 2000

SUNNYVALE, Calif., March 23 -- Power Integrations, Inc. (Nasdaq: POWI), today announced that it has entered into a settlement agreement involving the patent infringement lawsuit it initiated against Motorola (NYSE: MOT) in August of 1998.

Under the agreement, Power Integrations will continue as a preferred supplier of high-voltage power conversion ICs for cellular phone chargers that Motorola manufactures and the companies will work more closely together to develop future generations of cellular phone chargers for Motorola.

"We are very pleased that our differences with Motorola are behind us, and that we can return to the excellent business relationship we previously enjoyed with them," said Howard Earhart, president and chief executive officer of Power Integrations. "Although we believe that this settlement paves the way for us to achieve long-term revenue expansion with Motorola, it will not have any favorable impact on our financial performance in the near term," continued Mr. Earhart.

First Quarter Comments
Weaker than anticipated demand is expected to cause first quarter revenue to be between $26.5 million and $27.5 million, below consensus expectations of a flat sequential quarter. "We remain confident in the fundamental strength of the business and our business model. We will comment on the revenue and the business in general when we report our financial results for the first quarter on April 17, 2000 after the close of market." said Mr. Earhart.

Safe Harbor Statement
The statements in this news release, other than the historical financial information, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ from anticipated results. Further information on risk factors that could affect the Company's results is detailed in the Company's most recent reports on Form 10-K and Form 10-Q as filed with the Securities and Exchange Commission.

NASDAQ: POWI $119.08 -1.23
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