The concept of fiber optics remains active, UBS: the fiber optics industry is experiencing a price increase wave

Ask AI · How can AI competitions ignite a new era of fiber optic demand?

On April 3rd, the concept of fiber optics continued its strong momentum, with Tengjing Technology rising over 19%, and Changguang Huaxin, Guangku Technology, Juguang Technology, Huiyuan Communications, and Fojing Technology also gaining.

According to Securities Times, the fiber optic industry is experiencing a price increase trend. UBS’s latest research report cites data from industry research firm CRU, indicating that the price of European G652.D bare fiber reached 7.94 euros per kilometer in March (about $9.10), up 136% from January and 159% year-over-year.

China Galaxy points out that from the demand side, the core driving force of the fiber optic industry has undergone a fundamental shift: in the past, industry growth mainly depended on 5G base station construction and large-scale FTTH deployment, essentially solving the “connection or not” issue, with the three major operators dominating the centralized procurement market with strong bargaining power. However, since 2025, the global AI competition has spurred the construction of ultra-large intelligent computing clusters, and the interconnection of data centers has seen a surge in demand for high-bandwidth, low-loss fiber optics, officially shifting the industry from “operator infrastructure-driven” to “AI computing power-driven.” Meanwhile, fiber optic drones are achieving large-scale deployment in specific complex electromagnetic environments. These drones leverage their electromagnetic interference resistance and high bandwidth to transmit high-definition real-time images back to the control end, enabling remote precise operations. They use G.657A2 special optical fiber, with each drone consuming 20-50 kilometers of fiber, which is a single-use consumable, creating structural demand for specialized fiber markets. Additionally, emerging scenarios such as industrial internet and vehicle-mounted fiber further open up diversified and high-end demand growth spaces.

From the supply side, the core driver of this round of price increases is the bottleneck in fiber preform rod capacity: preform rods account for about 70% of industry profits, with high technical barriers and an 18-24 month expansion cycle. After previous price wars and supply clearing, capacity expansion has been limited, making it difficult for supply to keep up with demand growth. Currently, global preform rod capacity is approaching full utilization. Under capacity constraints, manufacturers are shifting preform resources toward higher-value-added special fibers such as G.657A2 for drones and G.654.E for AI data centers, squeezing the capacity of ordinary G.652.D fibers and exacerbating structural shortages. Overseas markets also face long expansion cycles for giants like Corning and Tohoku, making short-term supply gaps hard to alleviate. Overall, in the near future, prices of different types of fiber optic cables are likely to further rise, and the profits from these increases could also support R&D in cutting-edge technologies like hollow-core fibers, forming a virtuous cycle.

China Galaxy suggests that the current fiber optic cable price increases are mainly driven by three emerging demands: first, the large-scale construction of AI data centers creating interconnection needs; second, the rapid growth of specialized applications like fiber optic drones; third, the ongoing expansion of overseas infrastructure markets driving export demand. These demands are large-scale, with product structures evolving toward high-end and specialized types, indicating that the fiber industry may undergo a structural transformation. It is recommended to focus on core fiber optic cable manufacturers such as Yangtze Optical Fiber and Cable, Hengtong Optoelectronics, Zhongtian Technology, FiberHome Technologies, and Tongding Interconnection.