The global fiber optic cable market has exhibited a "volume-price resonance" trend since the fourth quarter of 2025. The core driver of the current fiber optic cable boom cycle is believed to be a restructuring of supply and demand dynamics. While some market participants anticipate that rising fiber prices will trigger large-scale capacity expansions by enterprises, the analysis suggests that effective new supply additions will remain limited over the next two years, potentially extending the duration of the prosperous cycle.
**Core View** **Focus on the New Boom Cycle in the Fiber Optic Cable Industry Under Supply-Demand Structure Reversal** Since Q4 2025, the global fiber optic cable market has shown synchronized growth in both volume and price. According to CRU statistics, the spot price for China's G.652.D bare fiber including tax reached 94.2 yuan per core-kilometer in March 2026, a 165% increase from January, surpassing the peak of the previous cycle. Spot prices in the US, Europe, and India increased by 48%, 128%, and 214% respectively compared to January. The core driver of this boom cycle is identified as a reshaping of supply-demand relationships. On the demand side, the construction of AI data centers and applications like drones are driving rapid increases in fiber consumption. On the supply side, constrained by the 18-24 month expansion cycle for optical preform capacity and high utilization rates, the supply-demand gap continues to widen, moving the industry from recovery to full-scale prosperity. Companies with optical preform production capabilities are suggested as focus areas, as they may benefit from profit margin expansion opportunities amid industry-wide price increases.
**Demand Side: Shift Between Old and New Drivers, AI Data Centers and Drones Emerge as Core Growth Areas** Industry demand is transitioning from being dominated by traditional telecommunications to a more diversified structure including AI data centers, specialty applications (e.g., drones), and telecom. Global fiber demand is forecast to reach 760 million and 889 million core-kilometers in 2026 and 2027 respectively, representing year-on-year growth rates of 28% and 17%. Emerging demand from data centers and drone fiber is expected to increase its share to 37% and 45% respectively, becoming the core growth driver. Compared to the previous cycle, this cycle's fiber optic cable demand exhibits three key differences: 1) The core demand shifts from connecting people and devices to connecting computing power and data; 2) The product structure is upgrading from homogenized to specialized and high-end; 3) North American cloud providers have ample capital expenditure, are more sensitive to performance and delivery timelines, and are likely to have improved price-pass-through ability and profit quality. Consequently, the current demand cycle's peak and sustainability are expected to exceed those of the previous cycle.
**Supply Side: High Utilization Rates and Optical Preform Capacity Constraints Support Upward Price Trend** Industry supply has reached an inflection point towards prosperity following the previous market consolidation. According to CRU data, global fiber production reached 652 million core-kilometers in 2025, a year-on-year increase of 13.76%, the highest growth rate in recent years. Supply is estimated at 725 million and 807 million core-kilometers for 2026 and 2027, with growth rates of 11% and 11% respectively. Geographically, the Asia-Pacific region and North America dominate global supply, with Chinese manufacturers accounting for approximately 60%, and overseas suppliers led by Corning, Furukawa, Sumitomo, Fujikura, and Prysmian. Currently, major global optical preform producers are generally operating at high capacity utilization. The optical preform expansion cycle is lengthy (18-24 months), and having learned from previous price wars, companies are making expansion decisions more cautiously. Rigid supply-side constraints prevent the industry from rapidly responding to the demand surge driven by AI computing power and drones, creating a supply-demand gap expected to support sustained high prices for optical preforms and fiber.
**Divergent Market View** Contrary to the market view that rising fiber prices will prompt large-scale capacity expansion, the analysis suggests limited new effective supply additions over the next two years, potentially prolonging the boom cycle. Reasons include: 1) The long optical preform expansion cycle and more rational post-consolidation industry behavior make large-scale new capacity unlikely in the short term; 2) High-end fiber production structurally consumes capacity: Major producers are shifting capacity towards AI data communication and drone-specific (e.g., A2) products, crowding out supply for standard fiber.
**Investment Recommendation: Companies with Optical Preform Capabilities Poised for Profit Enhancement** Leading companies hold high market share in optical preform capacity. The concentrated and optimizing industry structure grants these leaders stronger pricing power and profit capture ability during supply-demand tightening. Simultaneously, leading companies may enhance performance growth through optimized export structures and an increasing proportion of high-end products. Among second-tier manufacturers, companies capable of restarting or expanding optical preform production and currently trading at low valuations may present dual opportunities for "earnings recovery + valuation re-rating" against the backdrop of demand recovery and full capacity utilization at leading firms.
**Risk Disclaimer:** Risks include intensified industry competition and potential oversupply; potential decline in drone fiber demand if regional conflicts ease; and a downturn in AI computing investment sentiment. Content regarding uncovered stocks is based on objective public information and does not constitute a recommendation or coverage by the research team.
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