Amendment No. 2 to Wafer Supply Agreement



 Exhibit 10.47 
 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 TWO

 TO 
 WAFER SUPPLY AGREEMENT 
 This Amendment Number Two (the “Amendment”), effective
as of September 13, 2010 (the “Amendment Effective Date”), amends the Wafer Supply Agreement effective April 1, 2005, as amended by Amendment Number One effective December 19, 2008, (as amended, 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: 

  
 1 








 AGREEMENT 

 

	1.	Section 13.1 of the Agreement is deleted in its entirety and replaced with the following: 


13.1 This Agreement shall continue in full force and effect from the Effective Date until December 31, 2020, unless earlier
terminated as provided herein (“Term”). After [*] Seiko Epson may terminate the Agreement without cause at its convenience upon providing [*] prior written notice thereof to PI. If this Agreement has not been earlier
terminated, the parties agree to negotiate in good faith, beginning one year prior to the end of the Term, for this Agreement’s continuation for another [*] year period, on mutually agreeable terms and conditions. 

 

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


 

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


 

	4.	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/ Kazuhzro Takenaka
	  	By:	 	 /S/ John Tomlin

	Name:	 	 Kazuhzro Takenaka
	  	Name:	 	 John Tomlin

	Title:	 	 G.M. of Silicon Device BV
	  	Title:	 	 President

		 	Micro-Device Operations Div.	  		 	

 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. 

  
 2 








 Exhibit A 
 FOUNDRY CAPACITY and PI ANNUAL FORECAST 
 1. FOUNDRY CAPACITY 

The following FOUNDRY CAPACITY will be effective from [*] for the [*] calendar year. 

[*] WAFERS/month for DS and/or DM WAFERS 
 The following FOUNDRY CAPACITY will be effective from [*] for the [*] calendar year and [*] during the Term of the Agreement. 

[*] WAFERS/month for DS and/or DM WAFERS 
 The FOUNDRY CAPACITY shall be allocated equally on a monthly basis over a given calendar year. 

2. PI’s projected PI ANNUAL FORECAST of WAFER orders (non-binding) 
 For DS WAFERS 
  

											
	 Calendar Year
	  	2011	 	2012	 	2013	 	2014	 	2015
	 WAFERS
	  	[*]	 	[*]	 	[*]	 	[*]	 	[*]

 For DM WAFERS 

 

											
	 Calendar Year
	  	2011	 	2012	 	2013	 	2014	 	2015
	 WAFERS
	  	[*]	 	[*]	 	[*]	 	[*]	 	[*]

 3. The MAXIMUM FOUNDRY CAPACITY
ALLOCATION shall be [*] WAFERS per month or [*] WAFERS per year. 
 4. The REVIEW PERIOD is the [*] day period prior to the
commencement of the next calendar year. 
 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 DS + DM WAFER Volume
	  	2011
PRICE	 	2012
PRICE	 	2013
PRICE
	 Less than [*]
	  	[*]	 	[*]	 	[*]
	               [*]
	  	[*]	 	[*]	 	[*]
	               [*]
	  	[*]	 	[*]	 	[*]
	 [*] and above
	  	[*]	 	[*]	 	[*]

 For DM WAFERS in both PILOT PRODUCTION
and VOLUME PRODUCTION: 
  

									
	 Calendar Year

Monthly DM
 WAFER Volume
	 	 Monthly DS + DM
 WAFER Volume
	  	 2011

DM

PRICE
	  	 2012

DM

PRICE
	  	 2013

DM

PRICE

					
	 Less than [*]
	 	Less than [*]	  	[*]	  	[*]	  	[*]
					
	 Less than [*]
	 	              [*]	  	[*]	  	[*]	  	[*]
					
	 Less than [*]
	 	              [*]	  	[*]	  	[*]	  	[*]
					
	 Less than [*]
	 	[*] and above	  	[*]	  	[*]	  	[*]
					
	               [*]
	 	              [*]	  	[*]	  	[*]	  	[*]
					
	               [*]
	 	              [*]	  	[*]	  	[*]	  	[*]
					
	               [*]
	 	[*] and above	  	[*]	  	[*]	  	[*]
					
	 [*] and above
	 	              [*]	  	[*]	  	[*]	  	[*]
					
	 [*] and above
	 	[*] 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 = [*]¥/$ 
 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. 







 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 = 
 [*] 
 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 = [*]. 
 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.