Power electronics at a turning point, says Yole
The global power electronics industry is entering a new phase, according to Yole Group's s latest report, 'Status of the Power Electronics Industry 2026'.
After years of rapid expansion fuelled by electrification and renewable energy, companies are now navigating a more complex environment shaped by overcapacity, pricing pressure, geopolitical tensions, and intensifying competition.
Following a turbulent 2024–2025 period marked by geopolitical uncertainty, lower-than-expected EV demand, and significant manufacturing overcapacity, the power electronics industry is entering a new phase focused on consolidation, cost optimisation, and competitive positioning.
Despite these challenges, Yole Group forecasts the power device market to continue growing at a 7.1 percent CAGR between 2025 and 2031, reaching $41.3 billion by 2031. While growth prospects remain robust, industry priorities are changing.
Milan Rosina, Yole's principal technology and market analyst for power electronics & battery. said: "The power electronics industry is entering a new phase: growth continues, but the focus has shifted from expansion to competitiveness, cost optimisation, and market share."
One of the main messages delivered by Yole Group’s analysts is the accelerating rise of Chinese players across the power electronics value chain. Supported by strong domestic demand in EVs, photovoltaics, wind energy, and battery storage systems, Chinese companies are rapidly expanding their presence in SiC wafers, power devices, and industrial power modules, increasing competitive pressure on established global suppliers.
Xiran Zuo, Yole's technology and market analyst for power electronics said: "Power electronics is entering a new chapter. Companies are moving from capacity expansion to profitability, operational excellence, and long-term market positioning."
With electrification, renewable energy deployment, AI-driven infrastructure expansion, and automation continuing to drive demand, Yole says that understanding the evolution of the power electronics industry has never been more critical for device manufacturers, material suppliers, equipment providers, system integrators, and investors.
