Amendment number one to the Wafer Supply Agreement



 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
	  	










	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.










 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.










 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.