Today, new challenges are emerging for companies in the industrial, telecom, and infrastructure sectors. To address this, they must design or source power solutions that not only perform exceptionally well but also meet increasingly strict regulatory and sustainability demands. In this article, we’ll dive into the five most critical trends shaping the world of AC power supplies in 2025.
In this article, we’ll dive into the five most critical trends shaping the world of AC power supplies in 2025. We’ll explore next-gen efficiency made possible by advanced semiconductors, the rise of miniaturized designs, the power of embedded intelligence, the flexibility of modular architectures, and the growing importance of regulatory and sustainability imperatives. You’ll find key market data, actionable insights, and strategic implications to help guide your product innovation and sourcing decisions, ensuring you stay ahead of the curve.
Higher Efficiency with Next‑Gen Semiconductors
Efficiency has become a cornerstone of modern AC power supply design, and the key to unlocking it lies in next-generation semiconductors. New wide-bandgap materials like Gallium Nitride (GaN) and Silicon Carbide (SiC) are enabling power supplies to reach efficiencies of over 95%, a significant leap beyond what’s possible with traditional silicon. This isn’t just a minor improvement; it’s a game-changer. The need for more efficient and compact power solutions is fueling the rapid growth of the GaN and SiC power device market, which has a projected compound annual growth rate of over 25% through 2032 (Source: Consegic)
While both technologies are in high demand, a conversation at APEC 2025 highlighted the distinct roles they play. Thanks to its superior switching speeds that enable smaller, more compact designs, GaN is increasingly used for high-frequency, low-to-mid-voltage applications (up to 650V) like common industrial and consumer electronics. SiC, on the other hand, is the preferred choice for high-voltage applications (900V and above) and a primary option for devices like EV traction inverters (Source: Power Electronics News)
Major appliance and telecom OEMs are integrating SiC/GaN-based rectifiers and power factor correction circuits to reduce thermal dissipation and shrink cooling requirements. These gains translate directly into cost-savings and space benefits.
Smaller Form Factors & Higher Power Density
Power solutions are shrinking, and this trend is having a major impact on industrial and edge deployments. Thanks to improved packaging, smarter PCB layouts, and advanced thermal management, today’s AC power supplies can pack significantly more wattage into a smaller volume. This is especially true for compact DIN-rail AC/DC modules, which are becoming the go-to choice for modern industrial setups.
The DIN-rail power supply market is experiencing solid growth, valued at over $2.2 billion in 2025 and projected to expand at a steady rate over the next several years. (Source: 360iResearch) This growth is directly linked to the broader expansion of automation in urban infrastructure and smart manufacturing, where every inch of cabinet space counts. Smaller units improve cabinet density for everything from automation controllers to energy storage and EV charging systems. This not only optimizes space but also allows power solutions to be placed closer to the load, improving efficiency and reliability.
Embedded Intelligence & Connectivity
The “dumb” power supply is a thing of the past. Today, smart monitoring is no longer a luxury—it’s an essential feature. In 2025, leading AC power supplies come with embedded intelligence and built-in telemetry that provides real-time insights into performance. This includes usage logs, predictive fault alerts, thermal performance sensors, and even over-the-air firmware update capabilities.
The real power of this shift comes from connectivity. These smart units are designed to integrate seamlessly into industrial control networks using standard IIoT protocols like Modbus TCP, PROFINET, and EtherCAT. This powerful combination of intelligence and connectivity completely changes the game. Instead of reacting to failures after they happen, you can transition to a proactive, predictive maintenance model. This directly translates to guaranteed uptime, reduced maintenance costs, and facility-wide energy optimization, all of which are critical for staying competitive in today’s market. (Source: Industrial IoT Market)
Modular & Scalable Architectures
In a world where technology and power needs are constantly evolving, modularity is the key to building a future-proof power solution. A modular architecture allows you to scale capacity, ensure redundancy, and perform field-servicing with incredible ease. Instead of a single, monolithic unit, a modular power supply is built with interchangeable blocks that can be hot-swapped or paralleled to meet changing demands. This gives engineers the flexibility to adapt to new requirements without the time and cost of a full system redesign.
This trend is a major driver of market growth. The global market for modular and scalable power supplies was valued at $4.89 billion in 2023 and is projected to nearly double to $9.5 billion by 2030, growing at a healthy 10.1% CAGR. (Source: Grand View Research) This demonstrates a strong industry-wide demand for flexible architectures in critical sectors like telecom, edge computing, and data centers.
Today, leading vendors are offering modular AC-to-DC platforms with plug-in expansion modules that make it simple to add redundancy, enable load sharing, or even upgrade the power class as your needs evolve.
Regulatory & Sustainability Drivers
The final and perhaps most powerful trend is the one driving all the others: increasing regulatory pressure and the demand for sustainability. Compliance is no longer a simple checkbox; it’s a key driver of innovation. Global mandates like the EU’s Ecodesign for Sustainable Products Regulation (ESPR) and stricter US Department of Energy (DOE) rules are pushing manufacturers to meet tougher requirements for efficiency, electromagnetic interference (EMI), and low leakage.
Beyond compliance, sustainability goals are influencing design decisions in every stage of a product’s lifecycle. This means choosing recyclable materials, achieving Energy Star certification, and designing for low lifecycle emissions. Raw material volatility, particularly for materials like copper, is also a significant factor, forcing designers to optimize material usage without compromising performance.
Ultimately, these factors are not just about meeting a standard—they’re about gaining a competitive edge. Reports consistently emphasize that achieving high efficiency and adopting “green” design principles are critical for boosting adoption in sensitive and high-growth sectors such as healthcare, telecom, and renewable energy. It shows a commitment to not only performance but also a more sustainable future. (Source: Archive Market Research)
Market Overview & Strategic Implications
The AC power supply market is dynamic, and the numbers reflect that. Experts project that the broader Power Supply Units (PSU) market will reach an impressive $35.86 billion in 2025, expanding to approximately $49.3 billion by 2030. This immense growth is a direct result of the trends we’ve discussed, as the adoption of GaN/SiC devices and smart, modular designs fuels innovation across sectors like EV, telecom, and edge computing. (Source: Mordor Intelligence)
Why Product Managers and Engineers Should Care
For product managers and engineers, these aren’t just abstract trends—they are strategic imperatives that directly impact your ability to compete. Your semiconductor strategy—the choice between GaN and SiC—is more than a technical decision; it’s a strategic one that influences thermal design, size, cost, and overall performance. Similarly, embracing compact form-factors is critical for unlocking space- and cost-efficient designs. By building in IIoT readiness, you empower your customers to move to predictive maintenance, while a modular design gives them the flexibility to scale capacity and ensure redundancy. Finally, compliance is a proactive step that ensures market access and avoids costly retrofits down the line.
Staying ahead of these trends is essential! It allows you to not only meet the market’s evolving demands but also to be a leader in defining the next generation of power solutions.
Conclusion: Paving the Way for the Next Generation of Power
As we look toward the future, the five key trends we’ve explored—efficiency, density, intelligence, modularity, and compliance—are not isolated concepts. Instead, they are converging to create a new generation of smarter, smaller, and more sustainable AC power solutions that are purpose-built for the needs of tomorrow’s deployments.
Looking ahead to 2026 and beyond, we can expect to see:
- GaN-based power supplies becoming the standard for compact edge computing racks and ultra-fast EV charging infrastructure, where high power density is a must-have.
- Telecom-grade modular supplies becoming even more essential for the continued rollout of 5G and private mesh deployments, offering the flexibility and scalability these networks demand.
- IIoT-aware power electronics becoming a key enabler for renewable energy systems and smart grids, providing the real-time data needed to manage a more complex, decentralized power ecosystem.
If your team is working on the next generation of power supplies, it’s no longer enough to just meet today’s standards. To stay ahead, you need to be proactive. Get started today by benchmarking your approach to see how GaN and SiC could impact your product, exploring new designs with modularity and IIoT features, and aligning your product roadmaps with upcoming regulations. Your strategic decisions today will determine your success tomorrow!Your strategic decisions today will determine your success tomorrow!