Jury Finds in Favor of Power Integrations in Patent Lawsuit against Fairchild

October 10, 2006
Patent Infringement by Fairchild Was Willful, Jury Awards Damages of $34 Million

SAN JOSE, Calif. – October 10, 2006 – Power Integrations (OTC: POWI), the leader in high-voltage analog integrated circuits for power conversion, today announced that it has won a verdict in its patent-infringement lawsuit against Fairchild Semiconductor. A jury found that Fairchild has willfully infringed all four Power Integrations patents asserted in the case, and has awarded Power Integrations damages of approximately $34 million.

A second trial, scheduled to begin on December 4, will address Fairchild's challenges to the validity of the infringed Power Integrations patents. The patents are presumed to be valid, and Fairchild cannot prevail unless it proves the patents are invalid by clear and convincing evidence. Should Fairchild be unable to prove the patents invalid, Power Integrations intends to seek an injunction against the continued manufacture, importation and sale of the infringing parts, as well as enhancement of the damages award based on the jury's finding of willful infringement.

All 33 Fairchild parts asserted to have infringed, as listed below, were found to infringe and may be subject to an injunction. These parts are currently found in such end products as cellphone chargers, DVD players, TV set-top boxes, LCD monitors and others.

"Power Integrations respects the intellectual property of others, and we expect our competitors to do the same," said Balu Balakrishnan, president and CEO of Power Integrations. "We are the leader in our market thanks in large part to the intellectual property that we have worked hard to develop over nearly two decades. This is our third successful effort to protect this intellectual property against unlawful infringement by our competitors, and we will continue making every effort to protect it going forward."

List of infringing Fairchild parts:

FSD500 FSDM0365RN FSDM07652
FSDH321 FSDM0265RL FAN7601

Note Regarding Forward-Looking Statements

This press release contains forward-looking statements reflecting management's expectations regarding the favorable verdict in PI's lawsuit against Fairchild. These forward-looking statements are based on current information that is, by its nature, subject to change. Forward-looking statements are denoted by the use of the words and phrases "intends to" and "will." Actual results could differ materially from those projected or implied due to risks and uncertainties associated with the company's business and with patent litigation. These risks and uncertainties include, but are not limited to, the fact that the judge overseeing the case has substantial discretion over the amount of the damage award and the scope of the injunction, if any, that is placed on Fairchild's products; the fact that the verdict is subject to appeal; and the fact that there can be no assurance that any amount of damages will be paid to Power Integrations. General risk factors associated with the company's business are discussed in the company's most recent report on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

About Power Integrations

Power Integrations, Inc. is the leading supplier of high-voltage analog integrated circuits used in power conversion. The company's breakthrough technology enables compact, energy-efficient power supplies in a wide range of electronic products, in both AC-DC and DC-DC applications. The company's EcoSmart® energy-efficiency technology, which dramatically reduces energy waste, has saved consumers and businesses around the world more than an estimated $1.8 billion on their electricity bills since its introduction in 1998. For more information, visit the company's website at www.powerint.com.

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