The Small Companies Behind the Gas Turbine Shortage

The shortage has moved upstream from turbine assembly

U.S. electricity demand is expanding fast enough to force utilities, data centers, manufacturers, and independent power producers to secure firm generation years in advance. The U.S. Energy Information Administration expects electricity generation to rise 2.2% to a record 4,368 billion kilowatthours in 2026 and another 1.7% in 2027. Data-center development and increased manufacturing activity are major contributors, while natural gas is expected to continue supplying about 40% of U.S. electricity generation in both years.[1]

That demand is already visible in the turbine manufacturers' books. At the end of the second quarter of 2026, GE Vernova reported 116 GW of Gas Power equipment backlog and slot reservation agreements, up from 100 GW sequentially. The company expects at least 125 GW by the end of 2026 and is raising annual gas-turbine output toward 20 GW in 2026, 24 GW in 2028, and potentially 30 GW in 2030.[2] Siemens Energy reported its strongest-ever Gas Services quarter for orders in the first quarter of fiscal 2026, booking 102 gas turbines, converting 12 GW of existing reservations, and adding another 12 GW of reservations.[3]

This is the reversal of an industry that spent years preparing for less gas-turbine demand, not more. Reuters reported in 2025 that more than 100 GW of new U.S. gas projects had been announced after an extended period of weak construction. Industry participants were already reporting delivery lead times of more than five years for large turbines. The earlier slowdown had caused component suppliers to restrain investment or leave the market, shrinking the industrial base just before electricity-demand expectations accelerated.[4]

The result is a classic capacity problem with an unusual shape. GE Vernova can expand Greenville and Siemens can add turbine manufacturing capacity, but every incremental machine still requires a qualified stream of hot-section airfoils, castings, alloys, coatings, actuators, valves, seals, and other parts. Increasing final turbine output therefore pushes the shortage one layer backward through the supply chain.

This is why blades and vanes deserve more attention than their physical size suggests. Hot-section airfoils operate under extreme temperature, pressure, centrifugal force, and corrosive conditions. Advanced parts may be cast directionally or as a single crystal, with internal geometries that route cooling air through the blade. The manufacturing sequence can involve vacuum melting, ceramic cores, investment casting, heat treatment, hot isostatic pressing, machining, inspection, and protective coatings. Qualification attaches not just to a design, but often to a particular material, process, facility, and customer program. Adding a furnace is not equivalent to adding qualified output.

DPC Holdings is the clearest small public-company read-through

DPC Holdings is unusually exposed to this bottleneck. The company, better known through its Doncasters operations, generated $837 million of revenue in 2025. Industrial gas turbines contributed $351 million, or 42%, up from $280 million in 2024. Aerospace contributed another 35%, meaning most of the company operates in industries competing for many of the same high-temperature casting and superalloy capabilities.[5]

Its products sit directly in the constrained layer. Doncasters manufactures turbine blades and vanes, structural castings, combustion heat tiles, seals, and vacuum-melted nickel and cobalt superalloys. Its European operations include casting facilities capable of equiaxed, directionally solidified, and single-crystal production. The Bochum facility lists approvals from Siemens, GE, Ansaldo Energia, and Mitsubishi, while the company's SEC filing identifies Ansaldo Energia, Doosan, GE Vernova, and Siemens Energy as direct IGT customers.[5][7]

The financial asymmetry is more interesting than the customer list by itself. DPC's ten largest customers represented 68% of 2025 revenue. Customer A represented 22% and Customer B 16%, putting the top two at 38%. The prospectus does not identify those two customers, so it would be incorrect to assume they are GE Vernova, Siemens Energy, or any other particular OEM. What can be said is that a company with $837 million of 2025 revenue has both a large IGT revenue mix and substantial customer concentration, while selling critical components into an OEM market measured in tens of gigawatts of annual equipment demand.[5]

That is the kind of asymmetry that can transmit an industry cycle into a smaller supplier's financial statements. DPC's IGT revenue increased 25% in 2025 as greater capacity allowed it to serve higher customer demand, accompanied by pricing increases. In the second quarter of 2026, IGT still represented 39.4% of revenue, confirming that the exposure remained large after the IPO rather than being a temporary year-end mix effect.[5][6]

The other important feature is aftermarket exposure. Approximately 40% of DPC's 2025 castings revenue came from the aftermarket, weighted more heavily toward IGT because turbine blades and vanes are routinely replaced during a gas turbine's operating life.[5] That changes the economics of the current buildout. A turbine ordered today is not only an original-equipment opportunity. Once installed, it can generate recurring demand for replacement hot-section components over many years. The current capacity cycle therefore expands both the near-term production requirement and the future installed base requiring service.

Customer-funded expansion provides another clue about where bargaining power sits. DPC has entered strategic partnerships intended to address customers' casting capacity constraints, including arrangements in which customers support additional manufacturing capacity.[5] When large OEMs are willing to help finance a supplier's expansion, the relevant scarcity is no longer simply demand for a component. It is qualified capacity itself.

The main risk follows from the same concentration. Large OEM customers can dual-source, re-source, redesign, or internalize production. DPC explicitly identifies these possibilities as risks.[5] A concentrated supplier can benefit disproportionately while an OEM is capacity constrained, but the same supplier has less negotiating insulation if a major customer changes sourcing strategy. The exposure is asymmetric in both directions.

Impro and Woodward show two different versions of second-order exposure

Impro Precision Industries offers a less pure but potentially useful casting read-through. The Hong Kong-listed company is one of the world's larger independent investment-casting manufacturers and operates across investment casting, precision machining, sand casting, and other industrial processes. Its energy revenue rose 83.7% year over year in the first half of 2026, which management specifically attributed in part to data-center demand driving industrial gas-turbine requirements.[8]

The important qualifier is size. Energy represented only 3.3% of Impro's first-half 2026 revenue. Industrial gas turbines can therefore grow rapidly without yet dominating group earnings. The company also has meaningful overall customer concentration, with its largest customer representing 12.5% of 2025 revenue and its five largest representing 42.4%, but it does not publicly identify those customers in a way that would justify assigning that concentration to turbine OEMs.[9]

That makes Impro a different investment exposure from DPC. DPC is already heavily dependent on the turbine cycle. Impro is a diversified manufacturer in which turbine-related business is growing from a much smaller base. If turbine demand continues to outgrow its other end markets, the theme could become more financially visible over time. If the turbine cycle weakens, the current group-level exposure remains comparatively limited.

Woodward sits elsewhere in the stack. It supplies control systems, actuators, fuel-control equipment, and valves used in power-generation turbines. GE Vernova itself lists Woodward valve and actuator models in its gas-power control and mechanical instrumentation offerings, providing direct evidence that Woodward hardware sits inside the installed ecosystem.[11]

Woodward's fiscal 2025 filing gives the exposure financial context. Power generation generated $488.9 million of Industrial segment sales, compared with total Industrial sales of $1.254 billion. That makes power generation about 39% of the segment and roughly 14% of Woodward's consolidated revenue. GE Vernova, Rolls-Royce, and Caterpillar each met the threshold for disclosure as customers accounting for at least 10% of Industrial segment sales, although Woodward did not disclose their exact percentages. No individual customer reached 10% of consolidated company revenue.[10]

Woodward therefore has less turbine purity than DPC, but stronger evidence of a named customer relationship. It also illustrates why the shortage should not be reduced to blades and castings. Higher turbine production requires precise metering and control of fuel, air, and mechanical systems. A valve may represent a small share of an entire power plant's cost while still requiring a qualified design from a limited supplier set. Cost share and substitutability are different concepts.

Coatings, alloys, and post-casting processes are critical but financially harder to isolate

The further upstream the analysis goes, the more important it becomes to separate manufacturing scarcity from stock exposure. Oerlikon is a good example. Its Metco and Balzers businesses supply thermal spray materials and protective coatings for industrial gas turbines, including thermal-barrier systems for blades, vanes, shrouds, and other hot-section components. These coatings allow turbine parts to tolerate operating conditions that the underlying metal alone could not withstand and help protect against oxidation, corrosion, erosion, and fretting.[12]

This is clearly an enabling technology, but Oerlikon does not report industrial gas turbines as a standalone financial segment. Its 2025 results described aviation and energy as supportive end markets, while the company remained exposed to several other industrial applications.[13] The turbine cycle can improve utilization and mix without making Oerlikon a direct proxy for turbine deliveries. For an investor, that is a very different proposition from DPC receiving roughly two-fifths of revenue from IGT.

Bodycote occupies another process step. Hot isostatic pressing uses high temperature and pressure to eliminate internal microporosity in cast components. Bodycote specifically lists hot-section and structural gas-turbine components among the parts processed in significant volumes and says it operates the world's largest HIP network.[14] This matters because adding casting output upstream can simply shift the bottleneck into densification, heat treatment, inspection, or coating if those qualified processes do not expand at the same rate. Yet Bodycote's reporting does not provide a clean industrial gas-turbine revenue share, so its technical relevance is easier to establish than its earnings sensitivity.

At the raw-material level, ATI supplies nickel-based alloys, superalloys, forgings, and other specialty materials used in severe-temperature applications. Its capabilities are relevant to land-based turbine components, but 68% of ATI's 2025 sales came from aerospace and defense, while conventional energy represented 7% and specialty energy 6%. No single customer represented more than 10% of company sales.[15] ATI is therefore evidence that the turbine boom is competing for specialized metallurgical capacity, but it is a diluted way to express that view financially.

Haynes International illustrates the same point from another angle. Its HAYNES and HASTELLOY alloys are used in industrial gas-turbine combustors, transition pieces, rings, seals, shrouds, and other high-temperature structures.[16] Haynes ceased trading independently after Acerinox completed its acquisition in November 2024, so investors now obtain that exposure through a much larger stainless steel and high-performance-alloys group.[17] Again, the technology may be critical while the equity exposure is diffuse.

This distinction is useful because a long supplier list can otherwise create a false impression that every company benefits equally from the shortage. A coating supplier with hundreds of applications, a diversified alloy producer, and a casting company deriving 40% of revenue from IGT should not be treated as equivalent exposures simply because all three touch a turbine blade.

Casting capacity is becoming strategic enough to drive M&A

One of the strongest confirmations that advanced castings have become strategic came from outside the power OEMs. On September 8, 2026, GE Aerospace agreed to acquire Consolidated Precision Products for $11.75 billion, explicitly describing mission-critical casting capacity as necessary to support demand across commercial engines, aftermarket, and defense.[18]

CPP also serves the industrial gas-turbine market. The company describes itself as one of the few suppliers able to manufacture the large critical cast components required by advanced IGT platforms, including some of the industry's largest directionally solidified turbine blades and vanes.[19] Its Eastlake, Ohio operation can produce equiaxed, directionally solidified, and single-crystal blades for both aerospace and industrial gas turbines.

The transaction is not a GE Vernova acquisition, and it should not be interpreted as evidence that CPP's IGT output will be withdrawn from outside customers. The more useful conclusion is structural. Aerospace engines and industrial gas turbines draw on overlapping foundry skills, superalloys, airfoil technologies, furnaces, inspection processes, and experienced labor. When an aerospace OEM is willing to spend $11.75 billion to secure a major casting platform, power-equipment manufacturers are competing for capability inside an industrial base whose scarcity extends well beyond electricity generation.

That can have second-order consequences for independent suppliers. DPC's own filings describe the company as a scaled alternative to larger casting competitors such as Precision Castparts and Howmet.[5] If major customers increasingly use long-term agreements, co-investment, acquisitions, or insourcing to secure critical manufacturing steps, the strategic value of the remaining independent qualified capacity can rise even when its absolute revenue is small relative to the OEMs it serves.

It also creates an M&A risk for investors trying to extrapolate current relationships indefinitely. Vertical integration can improve supply security for an acquirer while reducing the amount of independent capacity available to the rest of an industry. At the same time, customers that become uncomfortable with a competitor owning a supplier may seek secondary sources. The important variable is therefore not simply industry demand, but who controls qualified capacity and how that control changes.

What the turbine shortage means for investors

The most useful way to analyze the gas turbine shortage is to follow capacity through each manufacturing gate. The first question is how many turbine slots GE Vernova, Siemens Energy, Mitsubishi, and other OEMs can actually convert into deliveries. The second is whether qualified suppliers can increase hot-section output at the same pace. The third is whether the economics of that expansion are large enough to matter to the supplier's financial results.

On those tests, DPC Holdings currently has the clearest smaller public-company exposure. Industrial gas turbines already represent roughly 40% of revenue, IGT sales grew 25% in 2025, the company has substantial overall customer concentration, and its products include the blades, vanes, structural castings, and superalloys sitting close to the physical bottleneck. Its aftermarket business also means today's turbine installations can create replacement demand long after the current new-build cycle peaks.[5][6]

Woodward is the next distinct category. Its power-generation exposure is material within Industrial, GE Vernova is a disclosed major Industrial-segment customer, and its valves and controls occupy a qualified part of the turbine system. The connection is financially meaningful, but more diluted at the consolidated-company level than DPC's IGT exposure.[10][11]

Impro Precision is earlier in that progression. The growth signal is strong, with energy revenue up 83.7% in the first half of 2026, but the end market is still only 3.3% of group revenue.[8] Oerlikon, Bodycote, ATI, and Acerinox through Haynes are important to coatings, densification, alloys, and hot-section materials, yet public disclosures make them weaker direct read-throughs on turbine shortages.

The risks are substantial. Electricity-demand forecasts can be revised, data-center projects can be delayed, reserved turbine slots may not all become completed plants, and the current wave of capacity additions could eventually loosen the market. Suppliers may also lose work through dual-sourcing or insourcing. Those risks matter particularly for companies spending capital today on equipment whose economics depend on utilization several years from now.

Still, the current shortage reveals something more durable than a temporary order spike. The scarce asset is not merely a gas-turbine factory. It is a network of foundries, metallurgists, coating specialists, valve manufacturers, heat-treatment operators, qualified tooling, and customer-approved processes that was not built for the rate of demand now being placed on it.

For investors, that creates a more precise conclusion than simply owning the three dominant turbine OEMs. The companies most exposed to the next stage of the cycle are the suppliers where difficult-to-substitute manufacturing capacity overlaps with meaningful customer or end-market concentration. DPC currently fits that description most clearly. Woodward offers a less concentrated route through controls and valves. Impro offers growing but still small casting optionality. The remaining alloy, coating, and processing companies are better viewed as indicators of where capacity may tighten next than as pure gas-turbine investments.

The gas turbine shortage, in other words, is becoming a hot-section supply-chain shortage. The next constraint is likely to appear wherever qualified capacity expands more slowly than the OEM assembly plans now being announced.

Sources

1. "EIA expects record electricity generation in 2026 and 2027," U.S. Energy Information Administration, September 9, 2026. https://www.eia.gov/pressroom/releases/press592.php

2. "GE Vernova reports second quarter 2026 financial results and raises 2026 financial guidance," GE Vernova, July 22, 2026. https://www.gevernova.com/news/press-releases/ge-vernova-reports-second-quarter-2026-financial-results-raises-2026-financial

3. "Q1 FY 2026: Continued market momentum drives strong start to the year," Siemens Energy, February 11, 2026. https://www.siemens-energy.com/global/en/home/press-releases/earnings-release-q1-fy-2026.html

4. "Rush for US gas plants drives up costs, lead times," Reuters, July 21, 2025. https://www.reuters.com/business/energy/rush-us-gas-plants-drives-up-costs-lead-times-2025-07-21/

5. DPC Holdings PLC Prospectus, U.S. Securities and Exchange Commission, June 2026. https://www.sec.gov/Archives/edgar/data/2107018/000110465926077968/tm269965-19_424b4.htm

6. DPC Holdings PLC Form 10-Q for the quarter ended June 28, 2026, U.S. Securities and Exchange Commission, August 2026. https://www.sec.gov/Archives/edgar/data/2107018/000110465926093772/dpc-20260628x10q.htm

7. "Doncasters Precision Castings Bochum, Germany," Doncasters, accessed September 2026. https://www.doncasters.com/contact/location/doncasters-precision-castings-bochum-germany

8. "Interim Results Announcement for the Six Months Ended 30 June 2026," Impro Precision Industries, August 2026. https://financialfilings.com/filings/impro-precision-industries-limited/interim-quarterly-report/2026/55895170/

9. "Annual Report 2025," Impro Precision Industries, 2026. https://financialfilings.com/filings/impro-precision-industries-limited/annual-report/2026/34654220/

10. Woodward, Inc. Form 10-K for the fiscal year ended September 30, 2025, U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/108312/000119312525296204/wwd-20250930.htm

11. "Mechanical Instrumentation and Asset Control Solutions," GE Vernova, accessed September 2026. https://www.gevernova.com/gas-power/products/digital-and-controls/mechanical-instrumentation

12. "Stressed and Hot Parts in Industrial Gas Turbines," Oerlikon Metco, accessed September 2026. https://www.oerlikon.com/metco/en/markets/power-generation/stressed-and-hot-parts-in-industrial-gas-turbines/

13. "2025 Full-Year Results," Oerlikon, February 24, 2026. https://www.oerlikon.com/en/about-us/media/press-releases/2025-full-year-results/

14. "Hot Isostatic Pressing," Bodycote, accessed September 2026. https://www.bodycote.com/what-we-do/hot-isostatic-pressing/

15. ATI Inc. Form 10-K for fiscal 2025, U.S. Securities and Exchange Commission, 2026. https://www.sec.gov/Archives/edgar/data/1018963/000162828026010140/ati-20251228.htm

16. "Power Generation," Haynes International, accessed September 2026. https://haynesintl.com/en/markets/power-generation/

17. "Acerinox completes the acquisition of Haynes International," Acerinox, November 21, 2024. https://www.acerinox.com/en/comunicacion/noticias/Acerinox-cierra-la-adquisicion-de-Haynes-International/

18. "GE Aerospace to Acquire Consolidated Precision Products, Expanding Mission-Critical Castings Capacity," GE Aerospace, September 8, 2026. https://www.geaerospace.com/news/press-releases/ge-aerospace-acquire-consolidated-precision-products-cpp-expanding-mission-critical

19. "Precision Castings for Industrial Gas Turbines," Consolidated Precision Products, accessed September 2026. https://www.cppcorp.com/industries/industrial-gas-turbines

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