Sinolink: AIDC exacerbates global power shortages, leading the way for gas turbines + multiple pathways for compensation.

Sinolink released a research report stating that the global expansion of AI data centers is driving an increase in electricity demand, while supply-side capacity remains tight. Against the backdrop of tight overseas machine production capacity, leading domestic gas turbine integrators will welcome accelerated opportunities to expand abroad. Additionally, the gas internal combustion engine business is expected to see acceleration in overseas expansion; leaders in the diesel power generation supply chain have continuously improved their competitiveness in recent years, with ongoing acceleration in overseas market development, indicating a potential for long-term income growth. It is recommended to pay attention to the domestic leaders in gas turbines, retired aircraft converted to gas engines, SOFC, gas internal combustion engines, and diesel power generation sectors that are enhancing competitiveness. The main points from Sinolink are as follows: AIDC intensifies electricity consumption, and power supply will remain tight until 2030. The construction of AIDC has led to a significant increase in global electricity demand. The firm projects that from 2025 to 2027, the electricity consumption of AIDC in the United States will account for 2.14%/6.07%/12.73% of the total electricity usage, respectively. The share of AIDC electricity consumption will increase significantly in 2027, with forecasts for more severe electricity shortages in the U.S. next year. Gas Turbines: The optimal solution for AIDC power supply, with an expanding supply-demand gap, leading domestic chains are expected to accelerate their overseas expansion. Gas turbines, with advantages such as stable power generation, suitability for peak load power generation, high power output, and low costs, are expected to become the preferred power supply solution for AIDC in the long run. Since 2024, overseas gas turbine leaders like GEV and Siemens Energy have seen continuous high growth in orders, with order visibility extending beyond five years and the industry remaining highly prosperous. Blades are the core components of gas turbines, characterized by high technical barriers and significant value contribution, making them a major bottleneck for gas turbine expansion. Due to the slow expansion of overseas blade leaders like PCC and HWM, domestic blade leaders such as Anhui Yingliu Electromechanical are accelerating their entry into the overseas supply chain. Furthermore, amid tight overseas machine production capacity, domestic gas turbine integrators like Yantai Jereh Oilfield Services Group, leading manufacturers like Shanghai Electric Group, and Dongfang Electric Corporation will also have accelerated opportunities to expand abroad. Retired Aircraft Converted to Gas Engines: Activating existing aircraft assets and opening new pathways for AIDC power supply. Aircraft and gas engines operate on similar principles and can be modified into gas engines by adjusting their components. The global leader in aircraft leasing, FTAI, possesses over 1,000 CFM56 aircraft assets and plans to launch FTAIPower (focused on converting CFM56 to 25MW gas engines) by the end of 2025, with capacity aiming to reach 100 units by 2027. The delivery speed for retired aircraft converted to gas engines is fast, with FTAI needing only 30-45 days to convert aircraft into power turbines. In April 2026, FTAI announced a joint venture with Yantai Jereh Oilfield Services Group, where Jereh will integrate the gas turbine modules and generators to jointly develop the data center market. On July 22, 2026, the joint venture signed a major contract worth $1.465 billion with a leading supercomputing company in the U.S., with future orders likely to increase over the long term. SOFC: Meeting the rapid deployment power needs of AIDC, leading companies securing GW-level orders. Solid Oxide Fuel Cells (SOFC) offer rapid delivery, low redundancy, high efficiency, and low emissions. Furthermore, with future government subsidies and economies of scale, there is potential for SOFC prices to decrease. Overseas SOFC leader BE has accelerated orders since 2025, with its equipment backlog reaching $6 billion in 2025, a year-on-year increase of 140%. On April 13, 2026, BE signed a $2.8 billion order with Oracle, marking the realization of GW-level orders. With the industry's prosperity improving, domestic supply chain leaders like Hubei Zhenhua Chemical and Chaozhou Three-Circle (Group) are expected to see simultaneous high increases in orders. Gas Internal Combustion Engines: Capturing overflow demand from gas turbines, overseas orders and expansions are accelerating. Gas internal combustion engines, with their short construction periods, quick response times, and lower initial investment thresholds, are positioned to capture overflow market demand amid tightening gas turbine deliveries. The global market for gas internal combustion engines is concentrated, with leading companies including Caterpillar, Yanmar (INNIO), and Wrtsil, accounting for 55% of the market share among the top five manufacturers by 2025. Caterpillar has seen quarterly increases in its backlog, with year-on-year growths of 79% and 92% at the end of Q1 and Q2 2026, respectively. In 2026, Caterpillar raised its production target for internal combustion and gas turbine capacities to 65 GW by 2030. In the context of global capacity shortages, the competitiveness of domestic supply chain leaders is continuously improving, and the overseas expansion of the gas internal combustion engine business is expected to accelerate in the future. Diesel Engines: Backup power sources for data centers, with domestic leaders accelerating entry into the global supply chain. Diesel generator sets are an irreplaceable backup power source. Benefiting from accelerated downstream capital expenditures, the demand for diesel generators is also rising sharply, resulting in a significant acceleration in revenue for overseas leaders in diesel power generation by 2026. Cummins is the global leader in diesel engines, with revenue growth rates for its Power Generation business at 2.41%/11.66%/17.56%/34.50% from 2023 to the first half of 2026, reflecting an upward trend in industry prosperity. Domestic leaders in the diesel power generation supply chain have continuously improved their competitiveness in recent years, with ongoing acceleration in overseas market development, indicating a potential for long-term revenue growth. Risk Warning Global data center expansion progress may fall short of expectations, domestic major manufacturers' capacity expansions may not meet expectations, there are risks of exchange rate fluctuations, and risks related to new product development may not meet expectations.