Silicon (Si)-based semiconductor devices have long dominated the power electronics industry and are used in almost every application involving power conversion. Examples of these include metal-oxide-semiconductor field-effect transistors (MOSFETs), insulated-gate bipolar transistors (IGBTs), gate turn-off (GTO), thyristors, and bipolar junction transistor (BJTs). However, for many applications, power device requirements such as higher blocking voltage capability, higher switching frequencies, lower switching losses, higher temperature withstand, higher power density in power converters, and enhanced efficiency and reliability have reached a stage where the present Si-based power devices cannot cope with the growing demand and would usually require large, costly cooling systems and output filters to meet the requirements of the application. Wide bandgap (WBG) power semiconductor materials such as silicon carbide (SiC), gallium nitride (GaN), and diamond (Dia) have recently emerged in the commercial market, with superior material properties that promise substantial performance improvements and are expected to gradually replace the traditional Si-based devices in various power electronics applications. WBG power devices can significantly improve the efficiency of power electronic converters by reducing losses and making power conversion devices smaller in size and weight. The aim of this paper is to highlight the technical and market potential of WBG semiconductors. A detailed short-term and long-term analysis is presented in terms of cost, energy impact, size, and efficiency improvement in various applications, including motor drives, automotive, data centres, aerospace, power systems, distributed energy systems, and consumer electronics. In addition, the paper highlights the benefits of WBG semiconductors in power conversion applications by considering the current and future market trends.