An improved system for cooling a power supply of a welding or plasma cutting system, and an improved configuration of a power supply. The system cools achieves the improvement in configuration and cooling by mounting electrical components to a circuit board and then to a heat sink. Electrical components are also mounted to a common panel that improves the circulation of air. A central panel supporting the power supply heat sink and components allows a smaller and more compact design while maintaining proper temperatures. Electromagnet cooling is improved by modifying electromagnetic cores to conduct heat to the heat sink, and by the use of thermally conducting polymers.