Powering the Future: Strategic Shifts and Geopolitical Headwinds in the DACH Power Supply Industry

By Engelbert Hopf, Markt&Technik
May 13, 2026

The power supply industry in the DACH region (Germany, Austria, Switzerland) finds itself at a pivotal crossroads. As of the first quarter of 2026, the sector is balancing a post-pandemic recovery with the volatile realities of a shifting geopolitical landscape. In a recent roundtable discussion, industry titans Karsten Bier (Recom Group), Bernhard Erdl (Puls Group), Hermann Püthe (inpotron Schaltnetzteile), and Martin Tenhumberg (Traco Power) convened to dissect the technological trends, market pressures, and economic anxieties defining the current fiscal year.

Main Facts: A Sector in Transition

The narrative of early 2026 is one of cautious optimism. Following a sluggish period of customer-side "destocking" that plagued the latter half of 2025, orders began to tick upward significantly starting in October and November. This momentum carried into the new year, sparking hope for a strong performance across the industry.

However, this optimism is fragile. While order books are healthier than they were twelve months ago, the industry is grappling with external shocks—most notably the ongoing conflict in the Middle East, which has lasted over two months. This conflict introduces a layer of uncertainty regarding global supply chains that could overshadow the positive growth trajectories initially projected for 2026.

Despite these hurdles, the industry remains resilient. "Made in Germany" remains a gold standard in the power electronics sector, particularly in the United States, where high-end, reliable power conversion technology continues to command respect even in the face of protectionist import tariffs.

Chronology of Market Dynamics

• Late 2025: The industry hits a low point in terms of customer demand, characterized by heavy inventory reduction (destocking) across the supply chain.
• Q4 2025 – Early 2026: A noticeable uptick in order intake begins to materialize, signaling a bottoming out of the market correction.
• March 2026: Round-table discussions reveal a consensus: the first quarter has provided a solid foundation, but the emergence of geopolitical conflict in the Middle East serves as a "dark horse" risk factor for the remainder of the year.
• May 2026: Industry leaders emphasize that while current supply chains are functional, the first signs of lead-time lengthening are beginning to appear, suggesting potential future bottlenecks.

The Political and Economic Landscape

A significant portion of the discourse focused on the domestic economic environment. There is a palpable sense of frustration regarding the pace of reform in Germany. While the industry participants acknowledge that the lingering effects of the previous government’s policies—and the resulting market stagnation—could not be corrected overnight, the satisfaction levels regarding the performance of the current coalition government are low.

The Bureaucracy Burden

The central critique from the leadership at Recom, Puls, inpotron, and Traco Power is that expectations for rapid change were set too high, yet the implementation of structural reforms remains sluggish. The industry is calling for a decisive "pruning" of bureaucratic red tape. For medium-sized power supply companies, the administrative load is not merely an inconvenience; it is a competitive disadvantage that hampers the ability to scale and innovate at the speed required to compete with global players.

Trade and Global Reach

When asked about the impact of American protectionism and import tariffs, the panelists were surprisingly pragmatic. The reputation of DACH-based power supply technology is robust enough to withstand political friction. US clients, particularly those involved in high-stakes engineering, remain loyal to European manufacturers, favoring quality and reliability over the lower costs associated with commodity-grade competitors.

Supporting Data: Technological Evolution

The technical side of the industry is undergoing a shift as significant as the economic one. The roundtable identified two primary drivers of innovation:

1. Bidirectional Power Supplies

The panel noted that a bidirectional switch does not equate to a bidirectional power supply. However, the integration of these switches is allowing engineers to create entirely new topologies and simplify existing designs. Currently, the industry sees these advancements as being most relevant in the industrial sector, specifically for applications requiring output power in the multi-kilowatt range.

2. Peak Power and Wide-Range Inputs

There is a clear market shift toward devices capable of providing high peak power, allowing for a more compact footprint while maintaining the ability to handle temporary surges. In the DC/DC converter segment, the trend is moving away from traditional 2:1 or 4:1 ranges. Manufacturers are pushing toward 8:1 or even 12:1 input ranges. This shift reflects a "One for All" design philosophy, intended to simplify the development process for customers by reducing the number of variants required for diverse regional and application-specific voltage requirements.

Official Responses and Strategic Pivots: The Rise of Defense

Perhaps the most notable strategic shift is the industry’s pivot toward the defense sector. Often referred to as the "New Rising Star" of the electronics industry, defense is no longer a peripheral concern for power supply manufacturers.

Previously, companies like Puls or Traco might have supplied the sector sporadically or on a per-project basis. Now, there is a coordinated effort to expand this business field. With a growing European focus on defense and security, power supply manufacturers are positioning themselves to provide the rugged, highly reliable components necessary for modern military applications. This represents a long-term hedge against the volatility of traditional industrial markets.

Implications: Supply Chains and the AI Effect

The most pressing question on the minds of the executives is whether the current stability in component availability is sustainable. As of late Q1 2026, the industry reports that they are receiving the components they need. However, the trend line is shifting: lead times are beginning to creep upward, even if only by a few weeks at this stage.

The AI Server Center Factor

While German and European power supply specialists are largely excluded from the massive AI server center construction boom—a market currently dominated by hyperscalers and massive Asian/American manufacturing networks—they are still affected by the ripples it creates. The massive consumption of components by the AI sector, combined with the potential for new supply chain "stress tests" caused by the conflict in the Middle East, creates a precarious environment.

The implication is clear: The industry must move from a "just-in-time" mentality to one of "strategic resilience." Companies are already beginning to evaluate how to insulate themselves from the potential surge in competition for silicon and passives that could arise if the AI boom creates a new global component shortage.

Conclusion

The power supply industry in the DACH region remains a cornerstone of the global electronics market. By focusing on high-end innovation—such as wide-range DC/DC converters and bidirectional power systems—and cautiously expanding into the defense sector, the industry is positioning itself for a future that is as challenging as it is promising.

Success in 2026 will likely depend on three factors: the ability of the German government to deliver on its promise of bureaucratic reform, the resilience of global trade routes amidst Middle Eastern instability, and the capacity of manufacturers to anticipate a potential tightening of the component market. As Karsten Bier, Bernhard Erdl, Hermann Püthe, and Martin Tenhumberg noted, the ingredients for a good year are present, but the recipe is being written in real-time under a difficult, unpredictable sky.