Exhibit 10.2

[Power Integrations, Inc. Letterhead]

July 6, 2006

Mr. Rafael Torres

Re: Amendment to Employment Terms

Dear Rafael:

This letter (the “Amendment”) is intended to amend the offer letter agreement
you entered into with Power Integrations, Inc. (the “Company”) on June 30, 2006
(the “Offer Letter Agreement”).

Specifically, we agree to the following:

 

  •   You will begin your employment with the Company on July 19, 2006 (the
“Start Date”), and you shall be the Principal Financial and Accounting Officer
of the Company effective as of that date.

 

  •   Your duties as Principal Financial and Accounting Officer will include the
timely and proper certification of the Company’s 10-K SEC filing applicable to
2005, as well as the timely and proper certification of the Company’s 10-Q SEC
filings applicable to Q1 2006 and Q2 2006.

 

  •   You agree that between the date you sign this letter agreement and the
Start Date, you will utilize your best efforts to review and analyze all Company
information necessary for you to be fully prepared to immediately execute your
duties as Principal Financial and Accounting Officer beginning on the Start
Date.

 

  •   On the Start Date, the Company will advance to you an initial bonus (the
“Initial Bonus”) of $50,000, less applicable withholdings and deductions. You
will earn the bonus when you have successfully completed six months of
employment with the Company. If you resign or are terminated for cause before
completing six months of service, you agree to repay the Company the gross
amount of the Initial Bonus, and authorize the Company to deduct from any final
salary, vacation, expense reimbursement or other amounts payable to you the
Initial Bonus, to the fullest extent allowed by law.

Except as expressly modified by this Amendment, all of the terms of the Offer
Letter Agreement shall remain in full force and effect. The terms in this
Amendment supersede any other agreements or promises made to you by anyone
concerning the terms set forth herein. This Amendment cannot be changed except
in a written agreement signed by you and a duly authorized officer of the
Company.

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If this Amendment is acceptable to you, please sign it and return to me as soon
as possible.

Sincerely,

 

/s/ Balu Balakrishnan

   Balu Balakrishnan    President and CEO    Accepted:   

/s/ Rafael Torres

  

7-10-06

Rafael Torres    Date

Confidential