Acknowledgment and Waiver



 Exhibit 10.34 
 ACKNOWLEDGMENT AND WAIVER 
 THIS
ACKNOWLEDGMENT AND WAIVER is made as of February 20, 2007, by and between POWER INTEGRATIONS, INC., a Delaware corporation, (the
“Company”) and R. SCOTT BROWN (“Director”). 
 RECITALS 
 WHEREAS, the Company has determined that certain of the
option agreements previously executed by Director, which correspond to the option grant numbers listed on Exhibit A (the “Noncompliant Option Agreements”), do not correctly reflect the date of grant and exercise price
of the options granted to Director pursuant to the 1997 Outside Directors Stock Option Plan (the “Directors Plan”); and 
 WHEREAS, Director has executed appropriate option agreements reflecting the correct dates of grant and exercise prices prescribed by the Directors Plan as set forth on Exhibit A (the “Appropriate
Option Agreements”); 
 NOW, THEREFORE, in consideration of the mutual agreements,
covenants and considerations contained herein, the undersigned hereby agree and acknowledge as follows: 
 1. Director and the Company
acknowledge and agree that the Noncompliant Option Agreements contained administrative errors and were not the appropriate option agreements relating to the options that Director was automatically granted under the Directors Plan; 
 2. Director and the Company further acknowledge and agree that the Appropriate Option Agreements supersede the Noncompliant Option Agreements and
constitute the exclusive agreements between the parties with respect to the subject options. Director and the Company hereby waive any rights each may respectively have had in connection with or arising out of the Noncompliant Option Agreements.

 3. Director and Company further acknowledge and agree that, with respect to any option exercised in whole or in part by Director
pursuant to a Noncompliant Option Agreement, Director shall provide to the Company, with respect to each share of Common Stock acquired upon exercise of such option, the amount by which the correct exercise price of such option exceeds the exercise
price paid by Director at the time of the exercise of such option. 
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 IN WITNESS WHEREOF, the undersigned have executed
this ACKNOWLEDGEMENT AND WAIVER as of the day and year first set forth above. 
  

					
	 COMPANY:
	 	POWER INTEGRATIONS, INC.
			
		 	By:	 	 /s/ Rafael Torres

		 	Name:	 	Rafael Torres
		 	Title:	 	CFO
		
	DIRECTOR:	 	 /s/ R. Scott Brown

		 	R. Scott Brown








 EXHIBIT A 
 OUTSIDE DIRECTOR OPTIONS 
  

													
	Director	 	Option
Grant
No.	 	Number
of Shares	 	Date of Option
Grant Set Forth in
the Noncompliant
Option Agreement	 	 Exercise Price ($)
 Set Forth in the
Noncompliant
Option
Agreement
	 	Correct Date of
Option Grant	 	Correct
Exercise
Price ($)
	S. Brown	 	000722	 	30,000	 	July 23, 1999	 	25.969**	 	July 15, 1999	 	35.875**
	S. Brown	 	000886	 	10,000	 	Dec. 13, 1999	 	43.875	 	July 15, 2000	 	24.500*
	S. Brown	 	001195	 	10,000	 	Dec. 12, 2000	 	15.500	 	July 15, 2001	 	17.000*
	S. Brown	 	001802	 	10,000	 	Dec. 12, 2001	 	24.590	 	July 15, 2002	 	17.790
	S. Brown	 	002163	 	10,000	 	Dec. 12, 2002	 	19.020	 	July 15, 2003	 	27.300
	S. Brown	 	002504	 	10,000	 	Dec. 12, 2003	 	33.850	 	July 15, 2004	 	22.740
	S. Brown	 	003237	 	10,000	 	July 25, 2005	 	22.440	 	July 15, 2005	 	23.220



	*	Closing price on the last trading day prior to the Anniversary Date, as the Anniversary Date was not a trading day. 


	**	Reflects 2-for-1 stock split on November 22, 1999.