Analysis of Supply Chain Bottlenecks for Heavy-Duty Gas Turbines Amid Surging Power Demand in North American Data Centers

North American data centers are experiencing unprecedented growth in power demand. According to web search results, data centers account for a relatively small share of global energy use, but their growth rate exceeds almost all other economic sectors [2]. In the U.S., natural gas is already the largest fuel source for data centers, accounting for over 40% of demand, while coal accounts for about 15% and nuclear power about 15% [3].

The U.S. Energy Information Administration expects natural gas to remain dominant, with a slight decline after 2024, while coal’s share will only rise slightly [1]. This shift has made natural gas power plants the default option to fill the power gap, further intensifying demand for heavy-duty gas turbines.

According to analysis data, the North American power equipment supply chain faces severe bottlenecks:

• Heavy-duty gas turbines
  : Lead time surged from the normal 52 weeks to 243 weeks, an increase of 367%
• Grid transformers
  : Lead time extended from 26 weeks to 140 weeks, an increase of 438%
• Average lead time increase
  : Reached 322.2%, indicating the entire supply chain is under enormous pressure

Capacity utilization rates of major equipment manufacturers have reached dangerous levels:

• Heavy-duty gas turbine manufacturers: 90% capacity utilization
• Transformer manufacturers: 85% capacity utilization
• Most key equipment categories: Over 75% capacity utilization

According to financial data analysis [0], the global heavy-duty gas turbine market presents a highly concentrated pattern:

• Market capitalization: $182.5 billion
• Annual increase: 98.44%
• P/E ratio: 108.38x
• ROE:19.11%

• Market capitalization: $102 billion
• Annual increase:134.56%
• P/E ratio:73.72x
• ROE:14.09%

• Market capitalization: ~$50 billion (estimated)
• Annual increase: ~75% (estimated)

These three manufacturers monopolize about two-thirds of the market share, with a total market capitalization exceeding $334.5 billion [0]. Analysts are generally optimistic about these companies; Evercore ISI recently gave GE Vernova an “Outperform” rating with a target price of $860 [5].

According to data analysis, Jereh Corporation (002353.SZ), as a Chinese oilfield service equipment manufacturer:

• Market capitalization: $71.89 billion
• Annual increase:98.05%
• P/E ratio:25.63x
• Net profit margin:18.04%
• Operating margin:22.02%

Chinese heavy-duty gas turbine technology is still in the verification stage, and large-scale commercialization is difficult to achieve in the short term. Technical barriers include:

• High-temperature alloy material technology
• Aerodynamic design
• Control system integration
• Long-term operation reliability verification

1. Supporting Equipment Supply
   : Chinese enterprises have competitive advantages in supporting equipment such as compressors, valves, and pipelines
2. Operation and Maintenance Service Market
   : As gas turbine installed capacity increases, demand for O&M services will grow rapidly
3. Technical Cooperation Opportunities
   : Gradually enter the high-end market through technical cooperation with European and American enterprises

1. Technical Breakthrough
   : With the maturity of domestic heavy-duty gas turbine technology, breakthroughs are expected in emerging markets
2. Cost Advantage
   : The cost advantage of Chinese manufacturing will play a role in price-sensitive markets
3. Supply Chain Reconstruction
   : Geopolitical factors may promote diversification of North American supply chains

• Heavy-duty gas turbine technology is extremely complex, requiring decades of technical accumulation
• Strict certification thresholds, need to meet international standard requirements

• Protectionist tendencies in the North American market may hinder Chinese products from entering
• Restrictions on technology transfer may affect Chinese enterprises’ access to key technologies

• Giants like GE Vernova and Siemens Energy have established deep customer relationships and brand trust
• The completeness of service networks and spare parts supply chains constitutes entry barriers

1. Focus on Leading Stocks
   : As industry leaders, GE Vernova and Siemens Energy are worth continuous attention
2. Seize Supply Chain Opportunities
   : Focus on leaders in sub-sectors that provide supporting equipment for gas turbines
3. Technical Cooperation Theme
   : Focus on related enterprises that may benefit from technical cooperation

1. Differentiated Competition
   : Avoid direct competition with European and American giants in heavy-duty gas turbine main units
2. Niche Market Breakthrough
   : Focus on specific application scenarios or supporting equipment fields
3. Strategic Cooperation
   : Gradually enter the market through establishing strategic alliances with North American enterprises

The surging power demand in North American data centers has indeed brought huge opportunities to the energy infrastructure market, but supply chain bottlenecks for heavy-duty gas turbines have also created unique market dynamics. Although Chinese enterprises like Jereh Corporation have certain advantages in related fields, they still face significant challenges to break through in this high-end market dominated by European and American giants. In the short term, Chinese enterprises are more likely to find opportunities in supporting equipment and service fields; in the medium to long term, they need to rely on technological innovation and strategic partnerships to achieve real market breakthroughs. Investors should pay attention to the investment opportunities brought by this structural change, while also recognizing the realistic constraints of technical barriers and market access thresholds.

[0] Gilin API Data
[1] Bloomberg - “Why So Much Is Riding on the Data Center Boom” (https://www.bloomberg.com/news/features/2025-11-21/how-the-data-center-boom-tests-grids-water-resources-capital-markets)
[2] Forbes - “As AI Booms, Data Centers May Create Electricity Scarcity Among Users” (https://finance.yahoo.com/news/data-centers-ai-energy-everything-220000884.html)
[3] Yahoo Finance - “Data Centers, AI, and Energy: Everything You Need to Know” (https://finance.yahoo.com/news/data-centers-ai-energy-everything-220000884.html)
[4] Yahoo Finance - “Gas Turbine Market Size to Worth USD 34.4 Billion by 2033” (https://finance.yahoo.com/news/gas-turbine-market-size-worth-113000047.html)
[5] Seeking Alpha - “Call It A Comeback: Nuclear Capacity Poised For Global Growth” (https://seekingalpha.com/article/4853390-call-comeback-nuclear-capacity-poised-global-growth)
[6] 247 Wall St - “Here Are Monday’s Top Wall Street Analyst Research Calls” (https://247wallst.com/investing/2025/12/15/here-are-mondays-top-wall-street-analyst-research-calls-bristol-myers-squibb-ge-vernova-kla-corp-klaviyo-las-vegas-sands-servicenow-and-more/)
[7] Insider Monkey - “Jim Cramer Believes GE Vernova is Not Done Going Higher” (https://www.insidermonkey.com/blog/jim-cramer-believes-ge-vernova-is-not-done-going-higher-1659138/)
[8] Forbes - “Why U.S. Natural Gas Prices Could Be Headed Higher In 2026” (https://www.forbes.com/sites/rrapier/2025-11-07/why-us-natural-gas-prices-could-be-headed-higher-in-2026/)