Patrizio Vinciarelli founded Vicor to solve power conversion challenges

Most people know that Gordon Moore, the legendary co-founder of Intel, made the famous observation back in 1965 that the number of transistors in a dense integrated circuit (computer chip) doubles approximately every two years. This cycle continues to this day, even as engineers approach the limits of how they can manipulate matter at a near-quantum level.

Few people know about the similar cycle of innovation required to convert grid power to power microchips. However, a professor who studied high-energy physics at CERN in Switzerland and the Institute for Advanced Study in Princeton, New Jersey, USA, has spent considerable time tackling this problem, from theoretical physics to commercializing a breakthrough power conversion method, with a company called Vicor. Founded in 1981 by PhD-turned-billionaire Patrizio Vinciarelli, Vicor designs, develops, manufactures and sells modular power components and complete power systems based on a range of patented technologies. He holds more than 100 patents in electronic conversion technology, took the company public (VICR) in 1990, and is now valued at over $2 billion.

“I spent the first 10 years after graduation doing basic research in particle physics at CERN in Geneva, Europe, Stanford University on the West Coast of the United States, and Princeton University on the East Coast. I gradually became a little frustrated with the progress of my academic field, which has experienced tremendous development in the past century, but in fact, progress is slowing down,” said Vinciarelli, who holds more than 100 patents for electron conversion technology.

He found the power conversion solutions of the time primitive and lacking scalability. He moved from academia to the business world to research how to achieve higher power density, or the ability to handle a lot of power in a smaller space with less weight and volume. At the beginning of Vicor, he came up with ways to achieve power reduction functions at frequencies 10 to 15 times higher than what was generally accepted.

It took Vicor about three years to go from theory to the first product in 1984. The first product offered a power density of 25 W per cubic inch, 20 times higher than any other solution at the time. According to Vinciarelli, two Nobel Prize winners in physics provided part of the seed funding for the launch of Vicor's products. "Since then, we have continued to refresh this key number, and now our products have reached a density of about 10,000 W per cubic inch. Compared with the technology level in 1980, as we continue to improve, the growth has now reached 3 orders of magnitude, or 10,000 times," said Vinciarelli.

Vicor's patented high-performance power modules generated nearly $400 million in sales in 2022, enabling rapid innovation in artificial intelligence, electric vehicles, solar, automotive, data centers and next-generation computing. The company is headquartered in Andover, Massachusetts, with more than 1,000 employees and a manufacturing facility in Andover. Vinciarelli is particularly proud that all of the company's manufacturing facilities are in the United States.

In fact, Vicor recently celebrated the groundbreaking of a new, 90,000 square foot, state-of-the-art power module manufacturing facility, also located in Andover. The facility was built to support the needs of the fast-growing industries the company serves. According to Vicor, it is the world’s first Converter-Level Package (ChiP™) manufacturing facility.

“Vicor has always advocated a U.S.-based manufacturing strategy. We have always believed that automation and technology should be based in the area of ​​engineering development, which means that engineering development should be very close to the factory,” said Vinciarelli.

Vinciarelli said the nearly $100 million investment in the new plant will pay off quickly, bringing the company about $1 billion in revenue each year. Even with this investment, the company is still cash flow positive, but it remains to be seen whether investors have the patience to invest so much money for future profitability. Vinciarelli's answer is that patient investors will be rewarded.

Vinciarelli grew up in Rome, Italy, the son of an academic and UN diplomat who traveled to conflict zones around the world. He was interested in science from a young age and witnessed exciting developments in physics, which he pursued further by attending the University of Rome, where he earned his doctorate. Postdoctoral studies brought him to the United States, where he spent the next 10 years working on better power system solutions and founded Vicor in 1981. He attributes his early entrepreneurial success to the encouragement and investment of the physics community and his academic colleagues.

What does the future hold for Vicor and the 76-year-old Vinciarelli? Will its $2 billion market cap make Vicor a takeover target for a larger company or private equity firm?

“As you can imagine, investment bankers are looking around. So we’re always interested in talking to them. But, frankly, I think the culture is very strong and the market opportunity is huge and timely. We’re enjoying it very much, and not just myself, but I think the people I work with in the company are excited about our prospects. So we believe that we’ll keep it going for the next 5-10 years. Maybe these acquisition opportunities will become more attractive. Personally, I’m energized and passionate and can’t think of a reason to do anything else,” Vinciarelli concluded.

By Bruce Rogers

I spent most of my career at Forbes as Chief Brand Officer, Chief Insights Officer, and founder of Forbes Insights and Forbes CMO Practice. I am currently the Managing Director of CXO Research at the Revenue Enablement Institute. I am the co-author of Profitable Brilliance: How Professional Services Firms Become Thought Leaders, available now on Amazon.