Exhibit 10.1

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

AMENDMENT NUMBER ONE

TO

WAFER SUPPLY AGREEMENT

This Amendment Number One (the “Amendment”), effective as of December 19, 2008
(the “Amendment Effective Date”), amends the Wafer Supply Agreement effective
April 1, 2005 (the “Agreement”) by and between:

 

  (1) POWER INTEGRATIONS INTERNATIONAL LTD., a Cayman Islands corporation having
a place of business at 4th Floor, Century Yard, Cricket Square, Elgin Avenue, P.
O. Box 32322, Grand Cayman KY1-1209 (“Power Integrations”)

and

 

  (2) SEIKO EPSON CORPORATION, a Japanese corporation having a place of business
at 281 Fujimi, Fujimi-machi, Suwa-gun, Nagano-ken, 399-0293 Japan (“Seiko
Epson”).

RECITALS

WHEREAS, pursuant to the terms of the Agreement, Power Integrations grants to
Seiko Epson licenses of certain of Power Integrations’ intellectual property for
the sole purpose of Power Integrations acquiring from Seiko Epson the
fabrication and supply of wafers of certain power IC products; and

WHEREAS, Power Integrations and Seiko Epson desire to amend the terms of the
Agreement; and

WHEREAS, in accordance with Section 18.10 of the Agreement, the Agreement may be
amended only by an instrument in writing duly executed by authorized
representative of Seiko Epson and Power Integrations.

NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby amend the Agreement as follows:

AGREEMENT

 

1. Exhibit B of the Agreement is deleted in its entirety and replaced with
Exhibit B in the form attached hereto.

 

Confidential

  

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2. Effective as of the Amendment Effective Date, all references in the Agreement
to the “Agreement” or “this Agreement” shall mean the Agreement as amended by
this Amendment. Except as expressly amended herein, the terms of the Agreement
continue unchanged and shall remain in full force and effect. This Amendment may
be executed in one or more counterparts, each of which shall be considered an
original, but all of which counterparts together shall constitute one and the
same instrument.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives, effective as of the Amendment Effective
Date.

 

SEIKO EPSON CORPORATION     POWER INTEGRATIONS INTERNATIONAL, LTD. By:   /s/
Kazuhiro Takenaka     By:   /s/ John Tomlin Name:   Kazuhiro Takenaka     Name:
  John Tomlin Title:   Deputy Chief Executive     Title:   President

 

Confidential

  

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Exhibit B

WAFER PRICES FOR VOLUME PRODUCTION OF SIX (6) INCH WAFERS BY

MONTHLY ORDER VOLUME

For DS WAFERS in both PILOT PRODUCTION and VOLUME PRODUCTION:

 

Calendar Year

Monthly WAFER
Volume

   2008
PRICE     2009
PRICE     2010
PRICE  

Less than [*]

   $ [ *]   $ [ *]   $ [ *]

[*] to [*]

   $ [ *]   $ [ *]   $ [ *]

[*] to [*]

   $ [ *]   $ [ *]   $ [ *]

[*] and above

   $ [ *]   $ [ *]   $ [ *]

Pricing will be reviewed and mutually agreed to in writing on an annual basis.

For WAFERS in ENGINEERING PRODUCTION, the price for each entry of the above
table will be multiplied by [*].

The above prices are the WAFER’S BASE_PRICE and are based on an exchange rate of
[*] ¥/$. The fluctuation in foreign exchange rate, as supplied by the Wall
Street Journal, will be shared equally by each party as follows

F/X_BASE =[*]¥/$

Initial F/X_RATE = [*]¥/$

A new F/X_RATE is only established at the time of placing a PO for WAFERS if the
[*] is equal to or greater than ±[*]¥ from the F/X-BASE. The new F/X RATE will
be set to the [*] and will remain in effect for at least the [*] it was
established.

The actual PURCHASE_PRICE for WAFERS, by WAFER TYPE, used at the time of order
will be calculated by the following formula:

PURCHASE_PRICE =

[*]

 

Confidential

  

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Examples: For DS WAFERS with a BASE_PRICE of $[*]

 

1) Nominal F/X Rate Example: F/X_RATE = in the range of [*]¥ to [*]¥:

  PURCHASE_PRICE = BASE_PRICE

 

2) Higher F/X Rate Example: New F/X_RATE = [*]¥:

  PURCHASE_PRICE = $[*] = [*]

 

3) Lower F/X Rate Example: New F/X_RATE = [*]¥:

  PURCHASE_PRICE = $[*] = [*]

 

Confidential

  

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.