Power Up Power One
07/02/2004 12:00 am EST
On his way to a technology forum in Korea, George Gilder asked Derek Lidow, former head of International Rectifier, ‘What is the hottest development in semiconductors?’ Lidow's answer: Power One. Here, Gilder analyzes the firm, which he has added to his Telecosm list.
"'Power One (PWER NASDAQ) is digitizing power management chips, which Lidow believes will transform the industry. He noted, 'Some 50% of the revenues of analog chip companies come from power management. Working in stealth, Power-One has figured out how to digitize this function. It won’t happen overnight, but over the next five years, power management is going digital.’ These comments caused me to look further at the company. Indeed, the digital economy now consumes some 14% of US electricity. Power also drives the microeconomy of silicon.
"Chips now operate at as much as 100 amps of current, enough to fuel 180 sixty-watt light bulbs. In a world of processors, the easiest way to limit power is to reduce the voltage, and delivering the right current at the right voltage with increasing reliability has become a key challenge. At the same time that engineers have been working to reduce voltage for large, fast chips, they have also started putting more of these chips on the same circuit board. Microprocessors, digital signal processors, field programmable gate arrays, application-specific integrated circuits, memory assays, all need to be linked together to perform the intense real-time tasks of high-speed communications. Each of these chips often needs its own highly reliable power source, usually supplying a unique voltage different from the rest of the circuit board and the other chips. How can we provide individualized precision to multiple chips, all on a relatively small circuit board?
"Increasingly, the preferred answer to this question comes from one company— Power One. An expert in the power arena for 30 years, Power-One has developed a new integrated board-level power system. It promises to remake Power One’s already strong line of power products. Operating in stealth for more than two years, Power-One has introduced the fruits of a $50 million program to radically simplify advanced printed circuit boards. Key to its simplicity is digital pulse width modulation (PWM). Unlike previously hardwired systems, digital PWM can output a wide range of specific voltages. Power-One estimates that its system could reduce design time for an advanced board from 8 weeks to 2 days. In a typical board design with eight voltage outputs, the company claims reductions from some 200 components to just nine.
"Sixty percent of Power-One’s current sales come from the communications sector, followed by industrial, auto, and semiconductor test equipment. Cisco is by far the biggest customer, at 16%, with Nokia trailing behind with just under 5%. And while the new system goes on sale later this year, the company does not expect significant sales until 2006. Of course, competition is gathering. But the company claims its innovations will be difficult to replicate because of hundreds of pending patents. Further, in developing a complete digital power regulation scheme integrated at the system level, only Power-One has mastered the entire set of skills needed to clear the shrubbery off the board and launch digital power control down a new learning curve. We've added PWER to our 'Telecosm Technologies' list, which represents companies at the forefront of their respective technologies."