POWI's growth hasn't really begun, yet!!! Last week POWI management gave management discussions at various brokerage firms, starting the day after they held their conference call. Here are a few highlights:
1. 43% of Q3's revenue came from their new TopSwitch II product line...which was released to the market earlier this year.
2. TinySwitch, their newest product line that was just released a few weeks ago, has already received a few design wins. Sales from this product line will begin to add to revenues in either Q1 or Q2 of '99. The market opportunity from this line of products is several times greater then the TopSwitch II line. Look for explosive starting in Q2 '99.
3. So far this year, POWI has sold 85 million Topswitch products and their one and only mega Japanese partner, Matshusta, has sold 35 million. This sales run rate has given them a 10% market share, already. However, the 800 million unit per year market opportunity has been expanded to 1.3 billion units a year with the TinySwitch line.
4. The Japanese / Asia problems do no really affect POWI because their products get sold to Asian companies to be built into export products.
5. One of the three main markets targeted by POWI is the desktop PC stand by (instant on) market. Currently, only 10% of Desktop PCs have this feature. The PC industry predicts that over 90% of Desktops will have the stand-by feature built into them by year 2000. TinySwitch is the only game in town for creating an energy efficent means of attaining instant on stand-by.
6. The market POWI is selling into is actually growing faster then the overall electronics industry. This is because POWI has brought semiconductor technology to the power supply and power effeciency markets. Collectively, these market opportunities, is a larger opportunity then the markets all the devices sell into.
7. Finally, what POWI has done, is replace very old pre 1970's and 1970's power supply solutions with modern semiconductor technology. This is the last electronics parts market to benefit from semiconductor technology. And POWI has a golden patent portfolio.
POWI has just begun to ramp. The big problem for analyst is how to keep estimates looking consistent, when in actual fact, sales have just begun to explode.
Remember, POWI went public last December. Although, the offering was for only 2 million shares, all three S.F. high tech brokerage firms took them out...H&Q, Montgomery and Robertson Stephens. And they allowed 1/2 of the offering to be insider selling. And all lock ups expired 180 days after the IPO. |
