Vicor Corporation designs, develops, manufactures, and markets modular power
components and power systems for converting, regulating, and controlling electric
current. We consider power components analogous to building blocks, and our
strategy is based largely on products, performing distinct functions, that can
be flexibly combined to enable a complete power system. We serve customers with
applications for which the high conversion efficiency (i.e., the ratio of output
power in watts to the power consumed by the device) and high power density (i.e.,
the amount of power in watts divided by the volume of the device) of our products
are well suited. We also offer a range of subsystems, utilizing our modular
components, to meet the specific needs of certain customers.
In the market segments we serve, we position the Company as a vendor of power
components that can be utilized individually, given their market-leading performance,
or combined, given their level of integration, to create highly-differentiated
power management solutions. We articulate this positioning through our “Power
Component Design Methodology”, which is our approach to providing our
customers the modular products, design tools, and support to enable the rapid
design of comprehensive power conversion and management systems.
Our Vicor Custom Power™ locations are geographically distributed across
the United States and all are incorporated in Delaware. In December 2015, we
completed the statutory merger of one Vicor Custom Power subsidiary, Mission
Power Solutions, Inc., with and into another subsidiary, Northwest Power, Inc.,
after which we closed the Mission Power Solutions location. Also in December
2015, we sold our 49% ownership interest in Aegis Power Systems, Inc. to Aegis
Power Systems, thereby ending our formal relationship with the subsidiary. The
consolidated financial statements presented herein reflect these transactions.
Internationally, we conduct business through subsidiaries incorporated in or
branch offices established in individual countries. Vicor Japan Company, Ltd.
(“VJCL”), our majority-owned Japanese subsidiary, which is engaged
in sales and customer support activities exclusively for the Japanese market,
is headquartered in Tokyo, Japan. Vicor B.V., a wholly-owned subsidiary incorporated
in the Netherlands, serves as our European distribution center. We have established
individual subsidiaries or branch offices to conduct the activities of Technical
Support Centers (“TSCs”) located outside of the United States.
VLT, Inc., incorporated in California, is our wholly-owned licensing subsidiary.
VICR Securities Corporation, incorporated in Massachusetts, is a subsidiary
established to hold certain investment securities.
We were incorporated in Delaware in 1981. Shares of our Common Stock were listed
on the NASDAQ National Market System in April 1990 under the ticker symbol VICR,
and we completed an initial public offering of our shares in May 1991.
In electrically-powered devices utilizing alternating current (“AC”)
voltage from a primary AC source (for example, a wall outlet), a power system
converts AC voltage into the stable direct current (“DC”) voltage
necessary to power subsystems and/or individual applications and devices (known
as “loads”). In many electronic devices, this DC voltage may be
further converted to one or more higher or lower voltages required by a range
of loads. In equipment utilizing DC voltage from a primary DC source (for example,
a battery), the initial DC voltage similarly may require further conversion
to one or more voltages. Because numerous applications requiring different DC
voltages and varied power ratings may exist within an electronic device, and
system power architectures themselves vary, we offer an extensive range of products
and accessories in numerous application-specific configurations. We believe
our product offering is among the most comprehensive in the market segments
we serve.
Since the Company was founded, our product strategy has been driven by innovations
in design, largely enabled by our focus on the development of differentiated
technologies, often implemented in proprietary semiconductor circuitry. Many
of our products incorporate patented or proprietary implementations of high-frequency
switching topologies, which enable the design of converter modules much smaller
and more efficient than conventional alternatives. Emphasizing the superior
power density and performance advantages of this technology, our primary product
strategy since our founding has been to offer a comprehensive range of component-level
building blocks to configure a power system specific to a customer’s needs.
Our strategy, competitive positioning, and product offerings, all based on highly
differentiated product performance, have anticipated the evolution of system
power architectures. As system designs advanced along with the demands of the
loads powered, the inherent limitations of historically accepted system power
architectures have caused designers to seek out improved solutions.
In 1984, we introduced a significant enhancement of the standardized DC-DC converter:
the fully-encapsulated “brick” module. Our innovative, patented
technology utilized our implementation of zero current soft switching topology
to deliver unprecedentedly high switching frequencies and, in turn, unprecedented
power density. Superior conversion efficiency, overall performance improvements,
and full encapsulation (which provided shielding from environmental influences)
contributed to significant enhancement of thermal performance characteristics,
an important competitive advantage. Such thermal performance enhancement has
been critical to the differentiation of our power converters, as the by-product
of voltage conversion is heat, which must be dissipated in order to assure the
performance of the converter itself and the overall system to which it is delivering
power.
The brick module integrated transformation, regulation, isolation, filtering,
and/or input protection into a single device, thereby driving the adoption of
the Distributed Power Architecture (“DPA”). The dominant system
power architecture up until that time, the Centralized Power Architecture (“CPA”),
generates all system voltages centrally and distributes these voltages to loads
using individual distribution buses (i.e., a conductive circuit, generally made
of copper). CPA became expensive and impractical for electronic systems increasingly
characterized by widely distributed loads requiring lower voltages, higher currents,
and higher speeds. DPA, enabled by the brick concept, allows the distribution
of one DC voltage system-wide and downstream conversion of that voltage, with
a brick, at a specific load. This approach allows electricity to be distributed
through a complex system in the most efficient manner, at a uniform higher voltage
(typically 48 volts), thereby dramatically reducing distribution and conversion
losses, lowering copper consumption, and significantly increasing design flexibility.
With patented advances in switching topology and converter design, Vicor became
a leading vendor of brick DC-DC converters in the 1980s and 1990s, particularly
within the telecommunications infrastructure segment of the market.
With the advent of enterprise computing in the 1990s, the limitations of DPA
became apparent, as the number of different loads on a system board increased
beyond the level for which DPA and bricks were well- suited. The Intermediate
Bus Architecture (“IBA”), a multi-stage extension of DPA, addressed
the space constraints, performance requirements, and cost challenges of highly
complex system boards by further separating the functions of DC conversion carried
out by the brick, which in IBA is replaced by an isolated bus converter delivering
a stepped-down (i.e., reduced), unregulated voltage to a non-isolated point-of-load
regulator. For computing and, later, networking applications, IBA was more scalable
and cost-efficient, as numerous brick DC-DC converters on a system board were
replaced by one brick DC-DC converter, providing one system-wide distributed
voltage, accompanied by numerous, lower-cost bus converters providing an intermediate
bus voltage, typically from 5 to 14 volts, to point-of-load regulators.
Reflecting our Power Component Design Methodology, we offer a comprehensive
range of individual, highly integrated building blocks enabling design of a
power system specific to a customer’s needs. Since introducing and popularizing
the encapsulated brick package format during the 1980s, our product focus has
been on high performance DC-DC switching converters providing the transformation,
regulation, isolation, filtering, and/or input protection necessary to power
and protect sophisticated electronic loads. With the development of FPA, VI
Chip modules, Picor point-of-load regulators, and, most recently, ChiP modules
and the VIA packaging platform, we believe we offer the most advanced range
of high-performance power components in the industry. A secondary and highly
complementary product strategy has been to vertically integrate our component-level
building blocks into complete power systems representing turnkey AC-DC and DC-DC
solutions for our customers’ power needs.