Power Integrations Announces First Quarter Results

April 25, 2001

1Q2001 Balance Sheet
1Q2001 Income Statement

SAN JOSE, Calif., April 25-- Power Integrations, Inc. (Nasdaq: POWI) a leading supplier of high-voltage analog integrated circuits for use in AC to DC power conversion, today announced financial results for its first quarter ended March 31, 2001.

Net revenues for the first quarter of 2001 were $26.2 million compared with net revenues of $28.0 million in the first quarter of 2000. Net income for the first quarter of 2001 was $3.9 million, or $0.14 per diluted share on approximately 28.4 million shares outstanding. This compares with first quarter 2000 net income of $4.9 million, or $0.17 on approximately 28.9 million shares outstanding.

"In light of the challenging economic environment, we are pleased with the results we achieved," said Howard Earhart, chairman and chief executive officer of Power Integrations. "However, the order rate turned dramatically down as we progressed through the quarter and has greatly reduced our visibility and outlook for our near-term results."

"Despite these unfavorable conditions, we believe the issues we are facing are temporary in nature. Our commitment to increase our market penetration rates and diversify our customer base through broader product offerings remains strong," he added. "As a result, we will make the necessary investments to continue our accelerated new product development and the expansion of our addressable markets."

Second Quarter 2001 Outlook

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Revenue for the second quarter is expected to decline sequentially by approximately 25 to 30 percent. With the continued investment in new product and market development, operating expenses may increase by 12 to 15 percent from the first quarter. Driven primarily by lower production volume, gross margin is expected to be in a range of 45 to 48 percent. Based on the above, second quarter earnings are expected to be at breakeven.

Conference Call

Power Integrations will broadcast its conference call discussion of its first quarter 2001 results and other developments for the company live over the Internet on Wednesday, April 25, 2001, 1:30 p.m. PDT (4:30 P.M. EDT). Interested parties may access the conference call over the Internet through the Investor Relations section of the Power Integrations web site at http://www.powerint.com . To listen to the live call, please go to the web site at least 15 minutes early to download and install any necessary audio software. A replay of the conference call will be indexed and archived on the company's site two hours following completion of the event.

Safe Harbor Statement

This press release contains forward-looking statements, which reflect management's current forecast of certain aspects of the Company's future business. These forward looking statements are based on current information which we have assessed, but which by its nature, is subject to rapid and even abrupt changes. Forward looking statements are denoted by the use of such words and phrases as "will," "expects," "believe," "should" and similar words and phrases that look toward future events or performance. The Company's actual results could differ materially from those projected or implied by our forward looking statements due to risks and uncertainties associated with the Company's business. These include, but are not limited to, changes and shifts in customer demand away from products that integrate the Company's ICs to products that do not. Other factors include, but are not limited to, our ability to maintain and establish strategic relationships; the effects of competition; the risks inherent in the development and delivery of complex technologies; our ability to attract, retain and motivate qualified personnel; the emergence of new markets for our products and services, and our ability to compete in those markets based on timeliness, cost and market demand; and our limited financial resources. Acceleration in new product introductions are subject to the risks and uncertainties that typically accompany accelerated development and delivery of complex technologies to the market place, including product development delays and defects. We more fully discuss these and other risk factors in the Company's most recent reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission.

About Power Integrations

Power Integrations, Inc. is a leading supplier of high-voltage analog integrated circuits for use in AC to DC power conversion. For more information, visit the company's web site at: http://www.powerint.com or contact the company at 5245 Hellyer Ave., San Jose, Calif. 95138; 408-414-9200.

NASDAQ: POWI $119.08 -1.23
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5245 Hellyer Avenue San Jose, CA. 95138

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