Cuộc gọi công bố kết quả kinh doanh quý 3/2026 của Power Integrations (POWI): Tăng trưởng GaN, mở rộng biên lợi nhuận và định hướng quý 4

Điểm nhấn chính

• Doanh thu quý 3/2026 tăng 6% so với cùng kỳ năm trước và tăng 5% so với quý trước lên 125,5 triệu USD, dẫn đầu bởi các sản phẩm GaN và nhu cầu ổn định từ mảng công nghiệp.
• Biên lợi nhuận gộp non-GAAP đạt 55,2%, trong khi biên lợi nhuận hoạt động non-GAAP tăng lên 21,4%. EPS pha loãng non-GAAP tăng 28% so với cùng kỳ năm trước và tăng 24% so với quý trước lên 0,46 USD.
• Doanh thu từ mảng truyền thông và máy tính đều tăng hơn 20% so với quý trước. Doanh thu mảng công nghiệp tăng 6% so với quý trước và tăng 13% từ đầu năm đến nay, trong khi doanh thu mảng tiêu dùng giảm 7% so với quý 2.
• Dòng tiền từ hoạt động kinh doanh đạt 43 triệu USD và dòng tiền tự do đạt 37 triệu USD. Tiền và các khoản đầu tư tăng 25 triệu USD lên 288 triệu USD.
• Hàng tồn kho kênh phân phối tăng từ 7,3 tuần lên 11,8 tuần do mảng thiết bị gia dụng suy yếu, các dự án đồng hồ đo bị trì hoãn và yêu cầu dự trữ tồn kho đệm của khách hàng tăng lên.
• Ban lãnh đạo dự báo doanh thu quý 4 đạt từ 118 triệu đến 126 triệu USD, biên lợi nhuận gộp non-GAAP đạt 54,5% - 55,5% và biên lợi nhuận hoạt động non-GAAP đạt 19% - 21%.

Dữ liệu tài chính cốt lõi

Kết quả kinh doanh và hoạt động

Các sản phẩm GaN là động lực tăng trưởng chính. Power Integrations cho biết công ty vẫn đang trên đà đạt doanh thu GaN hàng năm kỷ lục và đã giành được các hợp đồng thiết kế TOPSwitch-GaN đầu tiên, áp dụng cho ba mẫu thiết kế thiết bị gia dụng lớn tại các OEM hàng đầu. Những hợp đồng thiết kế khác bao gồm một sản phẩm nhà thông minh cho một OEM lớn của Mỹ và một thiết kế TV cho một OEM lớn của Hàn Quốc.

Doanh thu mảng truyền thông và máy tính đều tăng hơn 20% so với quý trước, nhờ nhu cầu theo mùa và các hợp đồng thiết kế GaN gần đây. Doanh thu mảng công nghiệp tăng 6% so với quý trước và tăng 13% từ đầu năm đến nay, nhờ sự tăng trưởng mạnh mẽ ở các ứng dụng công suất cao, cơ sở hạ tầng năng lượng và đường sắt.

Nhu cầu hiện tại đối với mảng kinh doanh bộ điều khiển cổng công suất cao của công ty đang vượt quá khả năng cung ứng. Ban lãnh đạo cho rằng tình trạng hạn chế này xuất phát từ nhu cầu tăng mạnh cũng như nguồn cung hạn chế về khâu đóng gói và bo mạch in.

Doanh thu mảng tiêu dùng giảm 7% so với quý trước, chủ yếu do doanh số bán điều hòa không khí giảm theo mùa. Nhu cầu thiết bị gia dụng vẫn yếu trong bối cảnh thị trường nhà ở đình trệ và giá bán lẻ tăng cao do thuế quan cùng chi phí nguyên vật liệu, đặc biệt là tại Mỹ và Trung Quốc.

Trung tâm dữ liệu và cơ sở hạ tầng năng lượng

Power Integrations đã công bố 5 hợp đồng thiết kế nguồn phụ mới trong quý 3 và 4 thiết kế socket 800 volt dự kiến đi vào sản xuất trong năm 2027. Danh mục cơ hội trong mảng trung tâm dữ liệu của công ty đã tăng hơn gấp ba lần kể từ đầu năm 2026.

Ban lãnh đạo cho biết khách hàng vẫn rất quan tâm đến công nghệ GaN 1.250 volt dành cho các ứng dụng đường dẫn nguồn chính. Các sản phẩm nhắm vào những ứng dụng này dự kiến sẽ cung cấp mẫu thử nghiệm vào năm 2027 và triển khai trong giai đoạn 2028 - 2029. Công ty cũng kỳ vọng sẽ có các cơ hội doanh thu liên quan đến công nghệ 1.700 volt vào năm 2027.

Power Integrations đang hợp tác phát triển giải pháp cầu dao bán dẫn với Ideal Power. Kiến trúc được đề xuất sử dụng công nghệ InnoMux 1.700 volt của công ty để cấp nguồn cho các mạch điện tử điều khiển từ bus 800 volt. Ban lãnh đạo cho biết dự án này vẫn đang ở giai đoạn đầu, với các nền tảng tham chiếu đang được phát triển.

Trong mảng cơ sở hạ tầng năng lượng, công ty đã giành được một hợp đồng thiết kế lưu trữ pin giá trị cao từ một khách hàng mới, được mô tả là nhà cung cấp lớn của Mỹ. Một khách hàng hiện tại trong mảng công suất cao cũng đang cung cấp biến tần lưu trữ pin cho một nhà cung cấp dịch vụ đám mây quy mô siêu lớn hàng đầu của Mỹ và có kế hoạch tăng cường sản lượng với nhiều khách hàng mới vào năm 2027.

Ô tô

Power Integrations đã giành được 10 hợp đồng thiết kế trong ngành ô tô vào quý 3, bao gồm bộ nguồn khẩn cấp cho biến tần của một hãng sản xuất ô tô hàng đầu của Đức. Danh mục cơ hội trong mảng ô tô của công ty đã tăng hơn 40% so với đầu năm.

Ban lãnh đạo kỳ vọng các kiến trúc nguồn phân tán, điện áp pin cao hơn và khả năng loại bỏ ắc quy 12 volt sẽ làm tăng số lượng socket điện áp cao trên mỗi xe. Công ty ước tính các xu hướng này có thể nâng giá trị nội dung khả dụng trên mỗi xe từ mức vài USD lên gần 100 USD trong 4 đến 5 năm tới.

Dự báo của ban lãnh đạo

Tại mức trung vị doanh thu 122 triệu USD, ban lãnh đạo dự báo doanh thu quý 4 sẽ tăng 18% so với cùng kỳ năm trước và doanh thu cả năm 2026 sẽ tăng 7%.

Triển vọng này dựa trên giả định mảng công nghiệp tiếp tục duy trì đà tăng trưởng mạnh mẽ và có sự đóng góp từ các hợp đồng thiết kế gần đây, nhưng bị bù trừ bởi nhu cầu tiêu dùng suy yếu, hàng tồn kho kênh phân phối ở mức cao và những hạn chế về nguồn cung trong các khâu bao gồm đóng gói và bo mạch in. Ban lãnh đạo cũng dự báo chi phí hoạt động non-GAAP cả năm sẽ giảm khoảng 4%.

Power Integrations đặt mục tiêu tăng gấp đôi quy mô thị trường mục tiêu có thể phục vụ vào năm 2031, nhờ sự mở rộng sang các mảng trung tâm dữ liệu, cơ sở hạ tầng năng lượng và ô tô. Công ty dự kiến sẽ cung cấp thêm thông tin chi tiết về chiến lược và mô hình kinh doanh mục tiêu tại Ngày hội Nhà đầu tư vào ngày 8 tháng 3 năm 2027.

Rủi ro và các yếu tố cần theo dõi

• Hàng tồn kho kênh phân phối đã tăng lên 11,8 tuần, cao hơn đáng kể so với mức mục tiêu 8 tuần của công ty. Ban lãnh đạo dự báo con số này sẽ vẫn ở mức cao trong bối cảnh khách hàng tiếp tục duy trì lượng tồn kho đệm bổ sung.
• Hàng tồn kho thiết bị gia dụng có thể mất từ 1 đến 2 quý để cải thiện, trong khi các dự án đồng hồ đo bị trì hoãn có thể mất từ 2 đến 3 quý để giải phóng hết qua kênh phân phối.
• Ban lãnh đạo cho biết hàng tồn kho kênh phân phối có thể duy trì ở mức khoảng 9 đến 10 tuần trong năm 2027 cho đến khi yêu cầu về tồn kho đệm giảm bớt.
• Những hạn chế về khâu đóng gói và bo mạch in đang giới hạn khả năng đáp ứng toàn bộ nhu cầu công suất cao hiện tại của công ty.
• Nhu cầu tiêu dùng vẫn yếu do thị trường nhà ở ảm đạm và giá thiết bị gia dụng tăng cao.
• Tình trạng thiếu hụt bộ nhớ đang ảnh hưởng đến các thiết bị điện tử cá nhân và máy tính, mặc dù ban lãnh đạo cho biết cơ cấu khách hàng và các hợp đồng thiết kế mới đang giúp giảm thiểu tác động đối với Power Integrations.
• Công nghệ GaN 1.250 volt của công ty có sự khác biệt rõ rệt, nhưng ban lãnh đạo thừa nhận rằng các yêu cầu tìm nguồn cung ứng của khách hàng có thể tạo ra thách thức trong việc ứng dụng.

Điểm nhấn phần Hỏi & Đáp với chuyên gia phân tích

Ban lãnh đạo cho biết các cuộc thảo luận tại Hội nghị Thượng đỉnh OCP đã mở rộng góc nhìn của công ty về cơ hội 800 volt vượt ra ngoài phạm vi chuyển đổi nguồn ở cấp độ giá đỡ sang cơ sở hạ tầng năng lượng, hệ thống lưu trữ pin và máy biến áp bán dẫn. Nguồn phụ là cơ hội trước mắt rõ rệt nhất, trong khi các sản phẩm GaN 1.250 volt cho đường dẫn nguồn chính có lộ trình thương mại hóa dài hơn.

Về hàng tồn kho kênh phân phối, Giám đốc Tài chính Nancy Erba cho biết mức tăng 4,5 tuần được phân bổ khá đều giữa sự suy yếu của mảng thiết bị gia dụng, sự chậm trễ của các dự án đồng hồ đo và yêu cầu tồn kho đệm của khách hàng. Yếu tố tồn kho đệm là khó dự đoán nhất và có thể khiến lượng hàng tồn kho duy trì trên mức mục tiêu thông thường của công ty cho đến hết năm 2027.

Ban lãnh đạo làm rõ rằng các hạn chế về nguồn cung công suất cao phản ánh sự gia tăng nhu cầu hơn là chỉ đơn thuần do gián đoạn chuỗi cung ứng. Công ty đang làm việc với các nhà cung cấp để đẩy nhanh tiến độ cung ứng PCB và đóng gói.

Power Integrations đang đánh giá các cơ hội hợp tác và các thương vụ mua lại tiềm năng để mở rộng danh mục sản phẩm, mặc dù tự phát triển vẫn là ưu tiên hàng đầu. Ban lãnh đạo đã xác định các cơ hội liền kề trong hệ thống điện của ngành ô tô và trung tâm dữ liệu, nhưng không cung cấp thông tin chi tiết về các giao dịch tiềm năng.

Toàn văn nội dung cuộc gọi công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Hello, everyone. Thank you for joining us, and welcome to Power Integrations Q3 earnings. After today's prepared remarks, we will host a question and answer session. [Operator Instructions] I will now hand the conference over to Joe Shiffler, Director of Investor Relations. Please go ahead.

Joe Shiffler

Thanks, Ben. Good afternoon, everyone. Thanks for joining us. With me on the call are Jen Lloyd, our CEO; and our CFO, Nancy Erba. After Jen and Nancy's prepared remarks, we'll open it up for questions. Slides accompanying today's earnings release and conference call can be found on our investor website at investors.power.com. Our discussion today will include forward-looking statements denoted by words like will, expect, should, outlook, forecast and similar expressions that look toward future events or performance. Such statements are subject to risks that may cause actual results to differ from those projected or implied. Such risks are discussed in today's press release, in our most recent annual report on Form 10-K and in subsequent quarterly reports on Form 10-Q.

During this call, we will refer to financial measures not calculated according to GAAP. Non-GAAP income statement measures exclude stock-based compensation expenses, amortization of acquisition-related intangible assets, accruals for a judgment in a legal matter, restructuring charge recognized in the first quarter of 2026 and the tax effects of these items. A reconciliation of non-GAAP measures to our GAAP results is included in today's press release and in the accompanying slides. This call is the property of Power Integrations, and any recording or rebroadcast is expressly prohibited without the written consent of Power Integrations. Now I'll turn it over to Jen.

Jennifer Lloyd

Thank you, Joe, and thanks, everyone, for joining us. We delivered solid Q3 results with revenue up 5% sequentially, led by strong growth from GaN products. We beat our outlook on gross margin and expenses, reflecting our continued emphasis on profitability. Our non-GAAP operating margin was up more than 6 points year-over-year in Q3, while non-GAAP EPS rose by 28%. These results demonstrate that we are executing well across our end markets. Industrial demand remains healthy with particular strength in energy infrastructure and rail. In fact, we currently have more demand than we can satisfy in our gate driver business due to certain supply constraints.

In personal electronics and computing, we saw strong sequential growth in Q3, driven by new GaN design wins and seasonal ramps. While memory shortages are a factor in these markets, the impact on our business is mitigated by our customer mix and new design wins. In the consumer market, which makes up 1/3 of our sales, demand continues to be soft due largely to stagnant housing markets and higher prices for appliances driven by tariffs and rising raw material costs. Against this uneven backdrop, we are on track to achieve our key financial and operational priorities for '26. These include revenue growth, improved profitability in the markets we serve today, advancement of our GaN technology road map and progress in our strategic pivot to the data center, EV and energy markets to drive faster growth in the years ahead.

I'm excited about our progress in each of these areas, and I'll provide an update on each, starting with our core business, where growth is being led by penetration of GaN across our end markets. We are on track for a record year of GaN revenue and had another strong quarter of design wins as customers look to our GaN products to improve efficiency and reliability. That includes our first design wins with TOPSwitch-GaN, which we introduced earlier this year, winning 3 major appliance designs at top-tier OEMs. Other wins include a recently announced smart home product for a major U.S. OEM and a TV design for a major Korean OEM using a GaN chipset addressing both AC to DC conversion and power factor correction. Now I'll turn to data center, where our high-voltage GaN continues to open doors at customers designing 800-volt systems.

At last month's OCP Summit, we met with hyperscalers, XPU suppliers, power supply and server ODMs and suppliers of energy infrastructure. Our discussions reinforced the demand for technologies that maximize power density and efficiency in 800-volt data centers. Engagements span applications from grid to rack, ranging from solid-state transformers and renewable energy to high-power sockets in the rack and power side car as well as a diverse range of AUX power sockets throughout the data center. For high-power sockets, customers continue to show strong interest in our 1,250-volt GaN to optimize power density, both by collapsing stacked power stages to reduce board area and by taking advantage of GaN high switching frequency to shrink magnetic components.

We are developing a range of high-voltage GaN products for the main power path, reflecting customer interest in a variety of integration levels and package configurations. These products are expected to sample to customers in '27 and then roll out in the '28, '29 time frame. Auxiliary power represents our most immediate opportunity to penetrate 800-volt architectures. We are seeing strong growth this year in AUX power for existing server architectures, including 5 new design wins in Q3, and we have 4 design-ins for 800-volt sockets scheduled to begin production in '27. Our opportunity pipeline has more than tripled since the start of the year and now includes a wide variety of 800-volt designs, including AUX supplies for compute trades, IT racks and side cars as well as network switches, fan power modules and solid-state circuit breakers.

In conjunction with the OCP Summit, we announced a collaboration with Ideal Power on a solution for solid-state circuit breakers. The collaboration addresses the need for innovative approaches to circuit protection in high-power, high-voltage data center environments, where mechanical circuit breakers are too slow to protect the valuable rack equipment. Existing electronic breakers introduce losses into the system, both from the protection device itself and the surrounding control electronics. So as rack power levels rise to hundreds of kilowatts and higher, any drain on system efficiency is a significant problem. An added challenge is that electronic breakers must be powered and in 800-volt systems, the power source is usually the 800-volt bus itself. That means the AUX supply must be capable of handling an 800-volt input.

So in the architecture we're developing with Ideal Power, our 1,700-volt InnoMux handles the 800 volts with ample margin. We power the intelligence that controls the ideal protection switch, which in turn protects the power path to the compute load. The result is an efficient self-powered breaker that meets the needs of 800-volt data centers, and we're excited to partner with Ideal Power on this innovative solution. Customer engagements for data center involve not just rack-level power conversion and protection, but also solutions for beyond the walls of the data center. Attach rates of battery storage systems to data centers are projected to rise rapidly in the years ahead, and we are well positioned to capitalize with our successful high-power gate drivers.

One of our top high-power customers is now supplying battery storage inverters to a top U.S. hyperscaler with plans to ramp with multiple new customers in '27. We added to our position in battery storage in Q3 with a high-value design win at a new customer, a major U.S. supplier of energy infrastructure. We are also expanding our customer engagements on solid-state transformers being developed for later phases of the 800-volt transition. Our high-power gate drivers are an attractive solution for driving switching modules and silicon-carbide-based SSTs, while GaN-based SSTs are an emerging application for our high-voltage GaN technology.

Finally, turning to automotive. We won 10 new designs in Q3, including an inverter emergency power supply for a top German automaker, and our pipeline has increased by more than 40% since the start of the year. We believe the outlook for the EV market is promising as higher gas prices have renewed consumer interest and the pricing delta between EVs and ICE vehicles continues to shrink. OEMs are moving to distributed power architectures in which micro DC to DC converters will power subsystems from the main battery instead of the lead acid batteries. One of our Chinese automotive customers recently announced its intention to eliminate the 12-volt battery, and we expect other OEMs to follow suit.

Meanwhile, rising battery voltages are driving interest in our higher voltage GaN, not only for low-power sockets, but also higher power DC to DC converters and onboard charging. Together, these 2 architectural trends have the potential to dramatically increase the number of high-voltage sockets per vehicle, driving our available dollar content from single-digit dollars to nearly $100 over the next 4 to 5 years and significantly expanding our SAM. In closing, we're excited about the opportunities ahead of us in data center, energy infrastructure and automotive. We expect these markets to drive rapid growth in our SAM with a goal to double SAM by 2031. Our strategy for driving revenue growth in these markets is taking shape, and I'm confident in our team's ability to execute the strategy.

I'm delighted to announce a new addition to the team, Tony Stratakos, who will join us next week as our Chief Technology Officer and SVP of Engineering. Tony is a noted thought leader in power semiconductors, having founded Volterra, served as CTO at Maxim Integrated and later founded a company specializing in utility-scale battery storage systems. I'm pleased to have Tony joining the team, and I look forward to introducing our executive team and providing an in-depth discussion of our strategy at an Investor Day in March 27. Now I'll turn it over to Nancy for a review of the financial highlights.

Nancy Erba

Thanks, Jen, and good afternoon. Our Q3 results demonstrate continued progress on revenue growth, margin expansion and cash generation. We reduced balance sheet inventory for the third consecutive quarter and announced an increase in our quarterly dividend. These results reflected disciplined execution across the company. Channel inventory increased during the quarter, reflecting both softer demand in certain markets and higher customer buffer stock requirements, which I'll discuss in more detail. Revenue for Q3 was $125.5 million, up 6% from a year ago and 5% sequentially.

The communications and computer categories each grew more than 20% sequentially on a combination of seasonal strength and recent GaN design wins. The industrial category continues to show healthy growth with a 6% sequential increase in Q3 and 13% growth year-to-date compared to last year. That strength led by high power has been fairly broad-based within the industrial category. Consumer revenue was down 7% from the prior quarter, driven mainly by seasonally lower revenue from air conditioning. As Jen noted, we have seen continued softness in appliances as that market continues to feel the effects of higher retail prices and weak housing markets, especially in the U.S. and China.

As previewed in my introduction, channel inventory rose by 4.5 weeks during the quarter to 11.8 weeks. Three factors drove this increase. The first is softness in appliances, where we expect sell-through to take 1 to 2 quarters to improve. The second is project delays in metering, particularly in India. We are starting to see signs of improving sell-through in metering in Q4 already and expect project launches to continue ramping through 2027. The third is channel partners building inventory to support end customers' higher buffer stock requirements. Some replenishment was expected as we entered Q3 with below normal channel inventory of 7.3 weeks, but the increase was higher than anticipated.

Both our channel partners and end customers tell us that amid broader supply chain constraints, they are holding additional buffer stock. Channel inventory, therefore, is likely to remain above our 8-week target while these conditions persist. We will continue to monitor sell-through and customer requirements closely as we manage shipments. Turning to gross margin. Non-GAAP gross margin was 55.2% for the quarter, above the high end of our outlook and up slightly from the prior quarter, benefiting from improved mix and higher manufacturing volumes. Non-GAAP operating expenses in Q3 were $42.4 million, down $2.8 million from the prior quarter.

Compared to the third quarter of last year, non-GAAP operating expenses were down more than 10%. We remain focused on disciplined expense management while protecting priority investments in GaN and our strategic growth markets. Our objective is to maintain ongoing profitability improvements while advancing the technology and customer programs that support longer-term growth. Non-GAAP operating margin for Q3 was 21.4%, up more than 4 points from the prior quarter and more than 7 points higher than the full year 2025 figure. This improvement reflects the operating leverage in our business model that comes with revenue growth and disciplined expense management.

Non-GAAP earnings for the quarter were $0.46 per diluted share, up 24% sequentially and 28% from a year ago. Turning to the balance sheet and cash flow. Cash flow from operations was $43 million for the quarter, while CapEx was $6 million, resulting in free cash flow of $37 million. Lower inventory was a significant contributor, falling by more than $7 million during the quarter. Days on hand fell by 19 days to 246 days at quarter end. Cash and investments on the balance sheet increased by $25 million during the quarter to $288 million. Reflecting the strength of our balance sheet and confidence in our ability to grow cash flow going forward, our Board of Directors has raised our quarterly dividend to $0.22 per share beginning in Q1 '27.

I'll now review the fourth quarter outlook. We expect revenue to be between $118 million and $126 million. At the midpoint, that would be an increase of 18% from the fourth quarter of last year and bring our full year growth rate to 7%. Our outlook reflects continued industrial strength and contributions from recent design wins balanced against softer consumer demand, elevated channel inventory and supply constraints, including packaging and PCBs. I expect non-GAAP gross margin for Q4 to be in the range of 55%, plus or minus 0.5 point. Non-GAAP operating expenses for Q4 should be in the range of $43 million, plus or minus $0.5 million. At the midpoint, that would be a slight increase from Q3, but once again lower than a year ago.

We are on track for a full year reduction of about 4% as we continue to drive expense discipline while protecting priority investments in our strategic growth markets and advancing our technology road map. Finally, I expect non-GAAP operating margin for Q4 to be between 19% and 21%. In summary, Q3 showed our ability to improve profitability and generate strong cash flow. We maintain measured in our near-term expectations for market growth while encouraged by our design win momentum and longer-term opportunities. Our focus is on disciplined execution, investing selectively in our strategic priorities and translating growth into sustainable earnings and cash flow to drive shareholder value.

We look forward to sharing more about our strategy and target business model at our upcoming Investor Day on March 8, 2027, in New York. Joe will be sharing more details in the coming weeks. And now Ben, let's begin the Q&A session.

Operator

[Operator Instructions] Your first question from the line of David Williams of Needham & Co.

Phần hỏi đáp

David Williams

Maybe first, Jen, you had talked about at OCP, there were -- it seemed like a lot of enthusiasm around the higher voltage power architectures. Was there anything there that changed maybe your view? It sounds like you're getting the design wins, better opportunities. But do you think there's anything there that pulls things forward or makes you maybe a little more optimistic about that 800-volt opportunity?

Jennifer Lloyd

Yes. Thank you, David, for the question. Yes, I mean, what we've talked about before, and we continue to be really happy about and our progress on, we continue -- first of all, we're engaging across the ecosystem. We are seeing the OCP designs growing in terms of our pipeline and our revenue across a broad range of power. And we -- as I mentioned in the prepared remarks, we are now seeing design-ins specifically for 800 volts there. So we're happy about that, and we're continuing to demonstrate good performance in available sockets.

As we've also talked about, the main path architecture for us, we're really focused on that opportunity with our 1250-volt GaN. So a little bit further out in time from the current 650-volt designs that are going on. I think what was exciting at OCP is really seeing the expansion of the partnerships beyond what's inside the data center to some of the new things that we're seeing on the racks as well as what's happening outside the data center. And so as we discussed, we're pretty excited about our high-power business, its ability to address some of those opportunities. So yes, I think we're seeing a broader opportunity for ourselves.

David Williams

Great. And maybe just on the inventory dynamics. It seems -- I think it's more of your exposure there maybe on the consumer side, but that's kind of a different story than what we've heard from a lot of your peers. Is there any other dynamics that we should be thinking about there? I mean, obviously, you pointed to multiple things that drove that. But do you still feel like the demand is there and there's no real softening on the broader demand environment? Does it feel like that is the case? Or is there other things maybe that we should be thinking about driving that inventory?

Nancy Erba

If I talk about consumer first, we are seeing softness there, and it is typically a softer quarter with air conditioning, as you're well aware in terms of that cyclicality. So that inventory buildup in China, and we are looking at it really region by region and by channel partner, as I talked about in the past, that buildup will take a couple of quarters to work through. If I look at India and the metering specifically, that is really a delay in project starts within India, which have now started to loosen up. And we've already started to see that in Q4. So I feel very good about that that higher inventory in India moving through starting in Q4, but really into next year as those larger projects kick off and get that moving within the channel.

And then the third area is one on the supply side, which is actually new. We -- as you can imagine, we've been having very frequent discussions with channel partners and our end customers as we saw this build up. And certain customers -- end customers are requiring these channel partners to hold additional inventory as they are seeing other supply constraints. And so that piece is the piece that will likely take a little bit longer to work through, and it's really going to depend on when those end customers allow that buffer stock level to decrease. But that demand is continuing to be healthy. And as Jen said, we're seeing more and more wins that are going to drive continued revenue growth. And unfortunately, it turned into a blip this quarter in terms of that higher level of weeks on hand.

David Williams

But it doesn't feel like it's potentially a golden screw type scenario where you're building inventory, waiting for other critical components in the supply chain?

Nancy Erba

I think some customers may be. But on a broader base, I think, no, we have multiple reasons for why we saw the buildup.

Operator

Your next question from the line of Tore Svanberg of Stifel.

Tore Svanberg

Maybe following up on that last topic. So I'm just trying to understand, Nancy. So is it fair to say that the 4.5 weeks is sort of equally distributed within those 3 reasons? And assuming that supply will remain tight for the industry, as you sort of go through '27, would you expect the channel inventory to be a little bit more elevated than normal? Would you target be kind of more like 9 weeks versus 8? So any color there?

Nancy Erba

I think it's fairly distributed. China with appliances, we saw that tick up later in the quarter. So it seemed to be moving fairly well in the first part of the quarter and then picked up towards the end. That I would expect to move through in the next couple of quarters, as I said. I think the metering will move through in the next call it, 2 to 3 quarters as well as those projects get underway. The one that is a little bit more challenging to predict is those that are increasing buffer stock. So I think for Q4, the level of weeks on hand will remain higher than we have targeted.

I think for next year, it is potentially a scenario where it sits at 9 to 10 weeks until we see the reduction in buffer stock. But we'll have to just keep watching it and stay in connection with our end customers, not only our channel partners, but their customers to really understand what -- when they start to see that buffer stock requirement reduce.

Tore Svanberg

Got it. But it's fair to say that it's probably not going to go above 11.8 weeks or at least you wouldn't let it go above that level at this point?

Nancy Erba

We certainly will do everything we can not to have that happen, yes.

Tore Svanberg

Very good. And as a follow-up for you, Jen, I do recognize 1,250, your GaN technology is a little further out. You didn't -- you also didn't mention 1,700 volt on the call. Just curious, especially given OCP and so on and so forth, like what's the level of interest in both of these very unique GaN technologies that you're now sampling?

Jennifer Lloyd

Yes. So I thought I did mention 1,700 volt. Maybe I didn't, but a couple of the wins that we referenced were using the 1,700-volt technology, just to clarify that. I think the level of interest is high. I mean what I'm really hearing again, and it's back to just the criticality of power in these systems is that the interest is high in technologies that will improve the efficiency, the power density, the board area, which translates to power density. The challenge with the uniqueness is the goals around sourcing, right? So right now, our 1,250 is very unique. And so we're working with our customers on it, but we will have to align and meet some of the challenges that they'll see with that as a unique technology.

Tore Svanberg

Very good. So it's fair to say that the design wins for both 1250 and 1700volt as far as materializing the revenue, we're looking at 2028, 2029 time frame.

Jennifer Lloyd

No, no, 27 for the 1,700. The 1,700 will be in '27 and it's it right? And then plane will be out in '28, '29.

Operator

Your next question from the line of Christopher Rolland of Susquehanna.

Christopher Rolland

I guess mine is around your supply chain, your foundry partners. They're a little bit different from others. Some I can consider a little bit more unconventional. And this has benefited you in the past when others have been kind of super tight, expanding lead times, et cetera. I guess, first of all, have you seen this as an opportunity? Is this something that you talk with your partners about maybe more availability of supply or lower lead times? And secondly, do you think this has anything to do with the channel build, maybe the channel getting these parts because they are available in front of either expanding lead times or price hikes like they've seen from other partners?

Nancy Erba

I think that is a potential. I want to see Q4 and Q1 start to improve and see things move through. But that availability certainly has benefited us historically. As Jen mentioned, in certain areas, in particular, in high power, we're actually tight ourselves and are asking customers to provide longer visibility to their forecast because we're seeing some level of shortages in PCBs as well as in packaging needs. And so we're starting to experience a little bit of that as well on the high-power side. On low power, certainly, the availability is a benefit to us to be able to meet customers' needs, and we are working closely with our end customers to make sure that they understand and that we can see that visibility to make sure that, that continues to be an advantage for us.

Christopher Rolland

Excellent. I think you preempted my second question. You may have been referring to the silicon gate drivers. You said they were supply constrained. I guess you might have just mentioned those choke holds, but if there's anything else to discuss there? And then also just the demand that you're seeing for this, is it substantially above? Or is it really just the supply chain factors?

Nancy Erba

We are -- we have right now more demand in our high-power business than we can supply, which is good, right? It's building that backlog. And we are doing everything we can and working with our supply chain to expedite and bring in the -- and I'll use PCBs as an example to try and bring in more in advance so that we can meet that demand.

Christopher Rolland

Is that from an upside in demand or your demand expectation? Or is it just -- are you highlighting the supply chain issues?

Nancy Erba

No, it's an increase in the demand, which is great. And as Jen mentioned, that's one of the areas that we are hearing a lot of interest from our customers and from new customers in terms of our capabilities in high power is certainly a large area of focus in the industry right now.

Operator

[Operator Instructions] Your next question comes from the line of David Williams of Needham & Co.

David Williams

So Jen, I just want to ask, I know in the past, you've talked about your portfolio being a bit more narrow and you would like to expand that a bit. And of course, you have those initiatives internally to build that organically. But if you look out and think about inorganic opportunities, how do you rate the environment today? Are there opportunities for you? And when could we see potentially you being more acquisitive in the future if that is where you'd like to go?

Nancy Erba

Well, we're probably not going to preannounce anything here on the call. That's a joke. But we are, as we have mentioned, actively evaluating different technologies and are looking at the ecosystem around us and whether that's through partnerships or potential M&A are looking to expand our product portfolio. Our first priority is to do that organically, and I think Jen will talk a bit about that with Tony joining. But we are absolutely looking at other ways that we can potentially use an inorganic opportunity to drive scale.

Jennifer Lloyd

Yes. And I'll just add to that, David. We are looking at what we can do organically. And I think you'll hear more as time goes on. We've talked about in automotive, expanding our BOM content and some of that will be through some new topologies. And same thing in data center, we're seeing some things adjacent to our traditional space. So stay tuned on that. Yes. Thanks for asking that.

David Williams

And just maybe lastly, if I could, on the Ideal Power partnership or relationship there, can you talk to us a little bit about how that is set up? And will that be a combined technology, combined packaging? Or is it a transfer of IP? Just any color around what that relationship could look like?

Jennifer Lloyd

Sure. Yes, that's really a co-development, I would say. And what's exciting about it is that we are seeing that the 2 companies coming together, our technologies play really well together like there are advantages in combining those technologies. But it's really early days. We're co-developing. We're working on some reference platforms and demonstrating the technology to customers. We're talking to a lot of customers. But it's very early days, but we're excited about that work.

Operator

There are no further questions at this time. I will now hand the call back to Jim Lloyd for closing remarks.

Jennifer Lloyd

All right. Thank you again for joining us today. I want to thank our employees at Power Integrations around the world for their hard work, innovation and commitment as well as our customers and partners for their continued collaboration and support. Thanks to the global trends like AI and electrification, power is becoming a critical constraint, driving the need for step function improvements in efficiency and power density. Our high-voltage technology and system expertise are well suited to meet these challenges, and we continue to execute on our technology and product road maps to create a long-term value for our stockholders. Thank you for your continued support, and we look forward to updating you again next quarter.