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Technology Stocks : Power Integrations (POWI) -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Bond who wrote (49)	6/25/1998 5:17:00 PM
From: Bobo	Read Replies (1) \| Respond to of 449

1. The last 10Q mentions two customers that comprise a significant portion of POWI's business. Do we know who they are, either I missed it or they are known as Company No customer accounted for more than 7% of rev last qtr according to my notes. Motorola was big customer in 97 but dropped off significantly in Q1 2. Products - Should POWI sell plenty of the TOP200 switchers instead of the TOP100, since they can operate from 85V to 265V (hence globally), or do you expect sales of TOP100 to occur in the USA, since the range in voltage is not required? How much do the TOP100 and TOP20 sell for? I think the vast majority of sales are TOPS200. Overall ASP about $.87 3. Matsushita and Oki manufacture for POWI. I read that the OKI deal is just about up, and they are re-negeotiating the contract. Would you expect that they will be able to secure a better price, now that the industry is in a slump? If so, wouldn't it make sense to secure a long-term contract, if prices are low? OKI contract was renegotiated; do not know details. It accounts for 70-80% of production fully in place. In the 10Q, I noted a statement that POWI received "strong initial orders from two new customers with major programs". Any idea if this is cell phone related, set-top box, or ... ? A major program for USB monitors started last Q (Phillips). The other one may be Nokia or Iomega 8. Tax Rate - 25%. Is this expected to change, or can we play with this rate for a while, since they are an IPO, or for any other matter? Tax rate will be 25% for year. 10. How much does the $/yen exchange rate affect POWI? I read about that in the 10Q, is it a serious factor, medium factor, or is it minor? Would it affect gross margins by more than 10%, if there was a huge shift in the exchange rate, exchange rate can be big deal since POWI pays for wafers in yen. It has also been an important hedge against pricing pressure from Korean competition. Negative impact would be if yen bounced back strongly. I imaging at some point the company would by yen futures contracts as hedge.

To: Jeff Bond who wrote (49)	6/26/1998 10:46:00 AM
From: Todd D. Wiener	Read Replies (1) \| Respond to of 449

Welcome, Jeff. Bobo did a good job answering most of your questions, so I'll just add that I'm currently short some January 10 puts. That means that I've sold naked puts on the stock. Assuming the stock is above $10 in 6 months, I'll have made some good money. If not, I'll buy the stock at $10 or sell at a loss. Options can be profitable if played carefully. Todd

To: Jeff Bond who wrote (49)	7/3/1998 4:23:00 PM
From: Jeff Lawlor	Read Replies (1) \| Respond to of 449

Jeff B., To your question on the customers, the last 10Q indicates that 2 "direct" customers accounted for 19% and 14% of Q1 revenue. However, there were no "end" customers which accounted for 10% or more of Q1 revenue. This indicates that these "direct" customers are distributors or merchant power supply manufacturers. I agree with you on the Taiwanese theory as the 2nd customer was not a large customer in 1997 but in Q1 suddenly represented 14% of revenue. This matches closely with the large increase in sales to Taiwan. Also, from the last 10K, Motorola is POWI's largest end user. However, most sales to Motorola occur through distributors and merchant power supply manufacturers. POWI estimates that 20% of their sales go to Motorola either directly or indirectly. POWI has excellent financials and its valuation is low compared to others in the industry. It seems like an excellent buy at these levels, however, I believe there will be continuous downside pressure on the stock as distribution by VC funds is expected. According to the 10K, 7MM shares became available to be sold on 6/12 as agreements expired. This has me a bit concerned. I think Thursday was indicative of what we may see over the next few weeks - high volume to the downside after a rise in stock price. Any lift in price over the next few weeks will probably be offset by a subsequent drop as these VC funds try to unload shares. Hopefully, it will just trade sideways over the next 2 weeks or so. Then results from Q2 will indicate whether it will resume an uptrend or drop further. Jeff L.