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Advances in power electronics enable efficient and flexible processing of electric power in the application of renewable energy sources, electric vehicles, adjustable-speed drives, etc. More and more efforts are devoted to better power electronic systems in terms of reliability to ensure high availability, long lifetime, sufficient robustness, low maintenance cost and low cost of energy. However, the reliability predictions are still dominantly according to outdated models and terms, such as MIL-HDBK-217H handbook models, Mean-Time-To-Failure (MTTF), and Mean-Time-Between-Failures (MTBF). A collection of methodologies based on Physics-of-Failure (PoF) approach and mission profile analysis are presented in this paper to perform reliability-oriented design of power electronic systems. The corresponding design procedures and reliability prediction models are provided. Further on, a case study on a 2.3 MW wind power converter is discussed with emphasis on the reliability critical components IGBTs. Different aspects of improving the reliability of the power converter are mapped. Finally, the challenges and opportunities to achieve more reliable power electronic systems are addressed.