Opinion: Vertical integration and geopolitics, a new era for power electronics

March 13, 2026

Ana Villamor, Director of Power Electronics and Photonics activities at Yole Group, and her team closely monitor technology developments, manufacturing strategies, and competitive dynamics across the global power electronics ecosystem, from materials and wafer production to devices and power modules.

Today, discover the 2nd article in a new Opinion series powered by Yole Group’s analysts, exploring the evolution of the power semiconductor supply chain and the challenges shaping its future.

From power Si and SiC manufacturing to vertical integration strategies and geopolitical dynamics, this series provides a clear perspective on the market forces influencing the semiconductor industry at the start of 2026.

📍Yole Group will also participate in APEC 2026, where analysts, Milan Rosina, Amine Allouche and Roy Dagher will deliver several high-level presentations covering key industry topics, including SiC adoption and supply chain evolution in xEVs, automotive power module packaging and cost trade-offs, and the expanding role of GaN from fast charging to data center applications.

During the show, meetings and discussions with Yole Group’s analysts can be organized on site. Feel free to reach out to schedule a conversation.

This Opinion series is based on Yole Group’s 2026 catalog of power electronics market and technology analyses.

Power electronics: manufacturing shift and vertical integration

Power silicon wafer production is shifting from 200 mm to 300 mm, while SiC, which is critical for high-efficiency power conversion, is scaling from 150 mm to 200 mm wafers to support next-generation devices. Both expansions boost throughput and reduce cost per device, accelerating the adoption of SiC MOSFETs over traditional diodes and transistors for more efficient systems in many applications. The production shift is being shaped by regional dynamics with Chinese players moving faster than power device manufacturers in other regions, especially when building new or upgraded manufacturing facilities, backed by strong governmental support.

Indeed, over the past several years, China has strategically closed gaps in its bare-die manufacturing, expanded its packaging capabilities, and increased the global market share of domestic IDMs. The results are clear: China has moved from system integrator to contender in silicon-based and wide-bandgap power technologies.

Why are we talking about vertical integration?

Many partnerships have occurred over last few years. By integrating the wafer production, device manufacturing and packaging, players are positioning themselves to compete on cost and technological sophistication, often narrowing the gap between Chinese companies and established global suppliers. This is increasing cost pressure increase for power electronics players around the globe.

However, not all power electronics segments are equal in complexity or margin. At Yole Group, we can give an example with two segments: power modules and power management solutions.

Power module market exponential growth is linked to electric vehicle production. Back in 2018-2019 using the highest-quality components and materials available and now decreasing little by little the cost-quality trade-off is decreasing progressively to a level that satisfies customers. The “good-enough” approach, reduces manufacturing costs and puts significant pressure on margins.
On the other hand, when talking about power management solutions, standard PMICs, which are low-cost, low-functionality devices, remain largely the domain of foundries, optimized for scale and efficiency. In contrast, multi-channel or multifunction PMICs, designed for niche, high-value applications with smaller volumes, require tighter integration, proprietary IP, and specialized know-how. These are increasingly handled by IDMs, which protect their intellectual property while scaling selectively.

China’s presence in the power electronics sector is growing as the country becomes self-sufficient in the face of ongoing risks to global trade flows: the increase in Chinese companies’ technological competences is striking.

All this points to the fact that China is not just chasing commodity components; it is moving deliberately into higher-tech, IP-sensitive segments where competitive advantage is harder to replicate.

Geopolitics redraws the competitive map

The current geopolitical environment brings an additional level of instability to power electronics markets. Mergers and acquisitions across borders are increasingly difficult when strategic technologies are involved. Even deals between EU- and US-based companies can be blocked if IP relevant to any form of military application is at stake.

A notable example was the failed acquisition back in 2017 of US-based Wolfspeed by Germany’s Infineon Technologies, which US regulators halted due to national security concerns over Wolfspeed’s military-related SiC technology.

Another example is the still ongoing Nexperia case (Chinese-owned, EU based), which was intervened by Dutch government only last October (Full analysis by Yole Group).

Yet collaboration remains possible in controlled forms. Strategic partnerships, carefully structured to comply with regulatory oversight, are emerging as a practical path forward. Alliances such as US-based onsemi working with Innoscience demonstrate that knowledge and capabilities can be shared safely, accelerating innovation while mitigating risk.

The implications for global supply chains are stark. China’s investments reduce its reliance on traditional suppliers in Europe, Japan, and the US. As SiC adoption grows in automotive and industrial applications, global players will need to rethink sourcing, risk management, and partnership strategies.

China’s rise also draws attention to a structural shift in power electronics. Success now depends on controlling advanced processes and safeguarding IP while navigating a complex geopolitical environment, rather than solely competing on cost or scale.

Through a dedicated portfolio of power electronics reports and teardowns, Yole Group provides decision-makers with data-driven insights to anticipate technology transitions, understand regional manufacturing shifts, and support strategic planning across the evolving power semiconductor supply chain.

👉 Join the conversation and interact with Yole Group’s analysts. How do you see vertical integration and geopolitical dynamics reshaping the power electronics landscape? What is the key role of China in the power electronics industry? Which supply chain challenges or technology shifts will have the greatest impact on your business?

Share your insights, questions, and perspectives in the comments. And let’s continue the discussion.

💬 Contact us to exchange with Yole Group’s analysts and explore deeper insights on the evolving power electronics ecosystem.

About the author

Ana Villamor, PhD is Director of Power Electronics, Photonics & Display activities at Yole Group.

Ana manages an international team and develops technical expertise and market know-how of the team.

In addition, she actively supports and assists in developing a dedicated collection of market & technology products and custom consulting projects.

Prior to Yole Group, Ana was involved in a high added-value collaboration within the CNM research center and onsemi (Formerly ON Semiconductor), a leading power electronics company. During that partnership and two years as a Silicon Development Engineer, Ana Villamor has acquired extensive technical expertise and in-depth knowledge of the power electronics industry.

Ana has authored and co-authored several papers, as well as a patent. Ana holds a PhD in electronics and an Electronics Engineering degree and a master’s degree in Micro and Nano Electronics from the Universitat Autonoma de Barcelona (Spain).

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