According to a research report, driven by AI and data center power demands, the gas turbine sector is entering a prolonged upcycle. Overseas industry leaders are seeing simultaneous increases in orders and price indices, with high service revenue ratios contributing to a rise in valuation benchmarks. The domestic supply chain is accelerating its capacity to capture the spillover of external demand, supported by import substitution and expansion capabilities.

The report recommends focusing on three key investment themes: first, domestic leaders in complete gas turbine systems and integration; second, core component and supporting equipment manufacturers that have entered the supply chains of overseas original equipment manufacturers (OEMs); and third, companies deeply embedded within the natural gas generator supply system. The main viewpoints are outlined below.

Global Gas Turbine High Growth: Triple Drivers of AI Computing, Grid Renewal, and Coal-to-Gas

The global gas turbine industry is experiencing a new, robust growth cycle. Demand is being propelled by three core drivers: the exponential growth in power consumption from data centers due to rapid AI development, making gas-fired power generation—with its high stability, small footprint, and 24/7 operation capability—a core power solution for AI data centers among North American tech giants; the global energy transition, where natural gas serves as a transitional fuel accelerating the shift from coal; and the peak renewal period for aging power generation fleets, with over 50% of grid infrastructure in developed economies exceeding 20 years of age, driving demand for equipment replacement and maintenance.

Heavy-Duty Turbines as Primary Power, Light-Duty as Flexible Support

Heavy-duty gas turbines are the main power source for large-scale power plants and combined-cycle facilities, with single-unit capacity exceeding 50MW and H/J-class combined-cycle efficiency surpassing 60%. They offer advantages in high power output, long lifespan, and stability, making them the optimal solution for baseload power. Aeroderivative and light-duty gas turbines serve as flexible, supplementary options, featuring rapid start-stop capabilities and modular designs for quick deployment, making them suitable for distributed energy, peak shaving, and rapid power supplementation scenarios.

Global Market Expansion Creates Import Substitution Opportunities

The global gas turbine OEM market is highly concentrated, with GE Vernova, Mitsubishi Heavy Industries, and Siemens Energy collectively holding approximately 85% market share. These major OEMs are currently in a phase of simultaneous order and capacity expansion. The resulting shortage in core component supply has become a key bottleneck limiting global OEM capacity release, creating a historic window for domestic component manufacturers to enter the global supply chain.

Natural Gas Generators: The Preferred Choice for Rapid Response in Mid-to-Small Scale Applications

Natural gas generators, with their advantages of short construction cycles, flexible deployment, and environmental and economic benefits, have become the preferred solution for rapidly responding to power needs in mid-to-small scale applications. Their delivery lead time of 18-36 months is significantly shorter than the 3-5 years for heavy-duty turbines, allowing them to effectively capture demand spillover. They are rapidly penetrating markets for data center backup power, distributed generation, and industrial load applications. Industry leaders like Caterpillar Inc. and Wärtsilä continue to secure large orders, indicating the sector has entered a high-growth expansion period.

Aeroderivative Turbines: Derived from Aviation Tech, a Tool for Fast Peak Shaving

Aeroderivative turbines are modified from aircraft engine cores, inheriting their high efficiency, lightweight design, and fast start-stop characteristics, making them core equipment for grid peak shaving and distributed energy. The global market is dominated by GE Vernova, Siemens, and Baker Hughes, which together hold about two-thirds of the market share. Their primary applications are concentrated in fast-response peak shaving power plants, distributed energy, and offshore oil & gas platforms. Leveraging aviation technology heritage and the advantages of repurposing retired aircraft engines, this segment exhibits stable long-term growth.

Key Risk Factors to Consider

Potential risks include fluctuations in raw material prices, international trade frictions, currency exchange rate movements, and deviations in data forecasts.