Makes ultra-compact power converters using a patented circuit design that packs far more power into far less space than conventional converters can.
Vicor makes power conversion modules that take AC or DC electricity and turn it into regulated DC outputs, using a patented circuit design called the Sine Amplitude Converter that switches above 2 MHz — a frequency at which conventional converters lose too much energy to operate, but at which Vicor's topology loses almost none, allowing it to pack more than 2,000 watts into a single cubic inch. Reaching that density requires custom ferrite-core transformers wound to proprietary specifications, because off-the-shelf cores saturate at the magnetic flux levels that frequency demands, so every unit must be assembled by hand to sub-millimeter tolerances inside a single clean room facility in Andover, Massachusetts — which means that facility's throughput is the ceiling on how many modules the company can ship in any quarter, no matter how strong demand is. Once a customer — an AI server builder, an aerospace contractor, an electric vehicle maker — designs one of these modules into their product, switching to a competitor triggers 18 to 24 months of mandatory requalification testing under aviation or automotive safety standards, plus a full circuit board redesign to accommodate a different pin layout, so the cost of leaving is high enough that most customers don't. The whole structure depends on the SAC patents holding: if a court invalidates them, any manufacturer with a clean room can replicate the switching topology and enter the same markets without waiting for the qualification clock that currently protects Vicor's installed base.
How does this company make money?
The company sells power converter modules directly, with prices ranging from around $50 for basic DC-DC converters up to more than $5,000 for ruggedized aerospace units. It also collects licensing royalties from other power electronics manufacturers who use the SAC and Factorized Power Architecture patents in their own products.
What makes this company hard to replace?
Aerospace and automotive customers must put any power module through 18 to 24 months of qualification testing under DO-160 or AEC-Q100 standards before it can be used in a product — so switching suppliers means starting that entire clock over. The modules are also physically designed into their customers' products: the heatsink geometry must match, and the pin layout is proprietary, so swapping to a different supplier forces a full circuit board redesign as well.
What limits this company?
Every unit must be built inside the Andover clean room, because the custom magnetic components and specialized capacitors required for operation above 2 MHz cannot be bought from outside suppliers. Expanding output means building new clean room bays and training new technicians in the precise sub-millimeter assembly work those components demand — and neither of those things can be sped up simply by spending more money.
What does this company depend on?
The company cannot run without gallium nitride (GaN) and silicon carbide (SiC) power semiconductors for high-frequency switching, custom ferrite cores made to its proprietary transformer specifications, multilayer ceramic capacitors rated for above-2 MHz operation, and automated pick-and-place equipment capable of 10-micron placement accuracy. It also depends on maintaining a clean room environment at Class 1000 particulate levels or better inside the Andover facility.
Who depends on this company?
AI data center operators rely on the company's Vertical Power Delivery modules to manage heat inside high-density server racks — without them, those systems would face thermal failures. Electric vehicle manufacturers use its bus converter modules in powertrain inverters and would lose their efficiency certifications without them. Aerospace contractors build its ruggedized DC-DC converters into avionics systems; without those specific units, those systems would fail DO-160 environmental qualification and could not fly.
How does this company scale?
Once a magnetic component design is validated, the SAC and Factorized Power Architecture circuit topologies can be reproduced across thousands of units without reinventing anything. But every one of those units still has to move through the Andover clean room, assembled by technicians trained to sub-millimeter tolerances — so the manufacturing floor remains the ceiling no matter how well the circuit designs replicate.
What external forces can significantly affect this company?
European Union RoHS rules limit the lead content allowed in the solder joints used in the high-frequency magnetic assemblies, which affects how the units are built. U.S. export control regulations known as ITAR govern which aerospace and defense customers the company can sell its ruggedized modules to, and those rules add legal complexity to international sales. Federal Reserve interest rate decisions affect how freely AI data center operators spend on new infrastructure, which directly shapes near-term demand.
Where is this company structurally vulnerable?
If the SAC and Factorized Power Architecture patents were struck down — through a legal challenge called inter partes review, an obviousness ruling, or the patents simply expiring without updated filings — any manufacturer with a clean room could copy the circuit topology and match the power density. That would remove the only technical barrier stopping a well-funded competitor from entering the AI data center and aerospace markets, and customers locked in by 18-24 month qualification cycles would eventually have somewhere else to go.
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