Power Integrations (POWI) 2026年第三季法說會：GaN成長、利潤率擴張與第四季財測指引

重點摘要

• 在 GaN 產品與穩健的工業需求帶動下，2026 年第三季營收年增 6%、季增 5% 至 1.255 億美元。
• Non-GAAP 毛利率達到 55.2%，Non-GAAP 營業利益率升至 21.4%。Non-GAAP 稀釋每股盈餘年增 28%、季增 24% 至 0.46 美元。
• 通訊與電腦領域營收季增均超過 20%。工業領域營收季增 6%、年初至今成長 13%；消費性電子營收則較第二季下滑 7%。
• 營運現金流為 4,300 萬美元，自由現金流為 3,700 萬美元。現金與投資增加 2,500 萬美元至 2.88 億美元。
• 受家電需求疲軟、電表專案遞延以及客戶安全庫存要求提高影響，通路庫存由 7.3 週上升至 11.8 週。
• 管理階層預估第四季營收為 1.18 億至 1.26 億美元，Non-GAAP 毛利率為 54.5% 至 55.5%，Non-GAAP 營業利益率為 19% 至 21%。

核心財務數據

業務與營運表現

GaN 產品為主要成長動能。Power Integrations 表示，年度 GaN 營收仍有望創下歷史新高，並贏得首批 TOPSwitch-GaN 設計導入 (design wins)，涵蓋頂級一線 OEM 大廠的三款主要家電設計。其他獲得採用的專案還包括一家美國主要 OEM 的智慧家庭產品，以及一家韓國主要 OEM 的電視設計。

在旺季需求與近期 GaN 設計導入的支撐下，通訊與電腦領域營收季增均超過 20%。工業領域營收季增 6%、年初至今成長 13%，在高功率應用、能源基礎設施與鐵路領域表現強勁。

該公司的高功率閘極驅動器業務目前供不應求。管理階層將產能受限歸因於需求轉強，以及封裝與印刷電路板 (PCB) 供應有限。

消費性領域營收季減 7%，主要原因是空調銷售受季節性影響下滑。在房市低迷以及關稅與原物料成本推升零售價格的影響下，家電需求持續疲軟，尤其在美國與中國市場更為明顯。

資料中心與能源基礎設施

Power Integrations 公布第三季取得五項全新輔助電源設計導入，以及四項預計於 2027 年投入量產的 800 伏特插槽設計導入。自 2026 年初以來，其資料中心潛在商機已增長超過兩倍。

管理階層表示，客戶對其用於主電源路徑應用的 1,250 伏特 GaN 技術興趣依然濃厚。針對這些應用的產品預計於 2027 年送樣，並於 2028 至 2029 年間推出。該公司亦預期 1,700 伏特技術相關營收商機將於 2027 年浮現。

Power Integrations 正與 Ideal Power 共同開發固態斷路器解決方案。該架構採用該公司的 1,700 伏特 InnoMux 技術，透過 800 伏特匯流排為控制電子元件供電。管理階層表示該專案目前處於初期階段，參考平台仍在開發中。

在能源基礎設施方面，該公司贏得一家新客戶的高價值電池儲能設計，該客戶為美國大型供應商。此外，一家既有的高功率客戶也正向美國頂級超大規模雲端服務商供應電池儲能變流器，並計劃於 2027 年擴大向多家新客戶出貨。

車用領域

Power Integrations 第三季取得 10 項車用設計導入，包括德國頂級車廠的變流器緊急電源。其車用潛在商機較年初成長逾 40%。

管理階層預期，分散式電源架構、更高的電池電壓以及未來可能淘汰 12 伏特電池等趨勢，將增加每輛車的高壓插槽數量。該公司估計，在未來四到五年內，這些趨勢有望將其單車潛在價值從個位數美元提升至近 100 美元。

管理階層財測指引

以營收預估中位數 1.22 億美元計算，管理階層預估第四季營收將年增 18%，2026 全年營收將成長 7%。

該展望預期工業領域將持續強勁，且近期設計導入帶來貢獻，但消費性需求疲軟、通路庫存偏高，以及封裝與印刷電路板等供應受限將抵消部分成長。管理階層亦預估全年 Non-GAAP 營業費用將下滑約 4%。

在資料中心、能源基礎設施與車用市場擴張的支撐下，Power Integrations 目標在 2031 年前將其可服務市場規模 (SAM) 翻倍。該公司計劃於 2027 年 3 月 8 日的投資人日上，進一步說明其策略與目標商業模式的細節。

風險與關注焦點

• 通路庫存增至 11.8 週，明顯高於該公司 8 週的目標水準。管理階層預期在客戶維持額外安全庫存的情況下，通路庫存仍將維持在偏高水位。
• 家電庫存可能需要一至兩季才能改善，而遞延的電表專案可能需要兩至三季才能在通路中去化。
• 管理階層表示，在安全庫存需求下降之前，2027 年通路庫存可能維持在 9 至 10 週左右。
• 封裝與印刷電路板供應受限，限制了該公司滿足當前所有高功率需求的能力。
• 由於房市疲弱與家電價格走高，消費性需求依舊疲軟。
• 記憶體短缺正影響個人電子與運算領域，不過管理階層表示，客戶組合與新設計導入正在減輕對 Power Integrations 的衝擊。
• 該公司的 1,250 伏特 GaN 技術具備差異化優勢，但管理階層坦言，客戶的採購規定可能會在導入時帶來挑戰。

分析師問答重點

管理階層表示，在 OCP 全球峰會上的討論拓寬了其對 800 伏特商機的視野，從機架級電源轉換延伸至能源基礎設施、電池儲能與固態變壓器。輔助電源是眼下最直接的商機，而用於主電源路徑的 1,250 伏特 GaN 產品商業化時程則相對較長。

針對通路庫存，財務長 Nancy Erba 表示，增加的 4.5 週平均分布在家電需求疲軟、電表專案遞延與客戶安全庫存要求。其中安全庫存部分最難預測，並可能導致庫存直到 2027 年都持續高於公司的正常目標水準。

管理階層澄清，高功率產品供應受限反映的是需求增長，而非單純的供應鏈中斷。該公司正與供應商合作，加快取得 PCB 與封裝產能。

Power Integrations 正評估合作夥伴關係與潛在收購案以擴充產品組合，但內部自主研發仍是首要之務。管理階層指出了車用與資料中心電源系統領域的相鄰商機，但未透露潛在交易的具體細節。

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完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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.