Direct Answer
Power electronics companies make the chips, modules and systems that convert and control electrical power in vehicles, chargers, data centers and industrial equipment. Silicon carbide and gallium nitride devices are replacing older silicon parts in high-efficiency designs.
Industry Overview
Power Electronics sits within the information technology sector. The first numbers to compare across companies here are design wins and backlog, revenue by end market and gross margin. The outside forces that move them are listed under Primary Macro Drivers.
Key Industry Metrics
- Design wins and backlog: Orders won from customers' new designs and orders not yet shipped. Design wins turn into sales over years, so a growing backlog shows future demand but timing depends on customer programs.
- Revenue by end market: Sales split among cars, industrial, energy and data centers. It shows where growth comes from and how exposed results are to vehicle production versus slower industrial cycles.
- Gross margin: Revenue left after wafers, packaging and factory costs. New wide-bandgap devices can earn more per part, while price competition and underused factories reduce it.
- Wafer capacity: The ability to produce silicon carbide and other power wafers. Added capacity supports growth but weighs on margin until filled, so compare additions with contracted demand.
- Automotive share: The portion of revenue from vehicle customers. A high share ties results to vehicle production and electrification pace, adding growth potential but also cyclical exposure.
Primary Macro Drivers
- Electric vehicle production: Each electric vehicle uses inverters, converters and chargers built on these chips, so vehicle output drives design wins, backlog and automotive share of revenue.
- Data center and renewable power demand: Server power supplies, solar inverters and storage systems all convert power, adding demand outside autos and diversifying revenue by end market.
- Wide-bandgap adoption: Silicon carbide and gallium nitride devices carry higher prices and efficiency than silicon, so a shifting mix raises revenue per device and requires wafer capacity.
- Industrial electrification: Factories, rail and grid equipment moving to electric power need drives and converters, supporting orders from sectors less tied to auto cycles.
Major Risks
- Customer concentration in autos: A few vehicle makers and suppliers account for much volume, so slow vehicle programs hurt revenue; watch automotive share and design win conversion.
- Price competition from China: Local suppliers expanding in these devices push prices down, compressing gross margin; watch average selling price, utilization and any share loss.
- Capital spending needs: New wafer lines for wide-bandgap material are costly and precede revenue, so weak demand strands capacity; watch capex against backlog and wafer utilization.
- Inventory cycles: Customers who overbought pause orders until stock clears, causing sharp revenue drops; watch inventory days at the company and its customers.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Medium |
| Regulatory Intensity | Low |
| Industry Maturity | Growth |
| Geographic Importance | Global |
Companies Associated with Power Electronics
The SEC's Standard Industrial Classification has no code that describes power electronics as a group, so there is no complete list of its filers. The companies below come from Swoopr's SEC dataset and have operations in or next to the industry. Each is classified by the SEC under its own main business.
| Company | SEC classification | Revenue | Growth | Net margin | Year |
|---|---|---|---|---|---|
| On Semiconductor Corp | Semiconductors & Related Devices | $6.0 billion | -15.3% | 2.0% | FY 2025 |
| Wolfspeed, Inc. | Semiconductors & Related Devices | $758 million | n/a | -212.4% | FY 2025 |
Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. Listing here describes a business relationship to the industry, not a recommendation. To find more companies, use the company directory and the information technology hub.
Where to Go Next
The Power Electronics guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Power Electronics industry?
Key performance indicators for the Power Electronics industry include: Design wins and backlog, Revenue by end market, Gross margin, Wafer capacity, Automotive share. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Power Electronics industry?
The Power Electronics industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Power Electronics industry?
The primary risks for Power Electronics companies include: Customer concentration in autos, Price competition from China, Capital spending needs, Inventory cycles. Investors should assess each company's exposure to these factors and its track record of navigating them.