According to the latest communications industry research from TrendForce, rising fiber demand driven by AI data centers, cross-data center interconnection, and high-capacity backbone network construction is expected to push the global fiber supply-demand gap to 180 million core kilometers in 2026, with supply tightness driving spot prices of finished optical fiber up by 2.8 to more than 5 times year-on-year.
In response, telecom operators are gradually adjusting their procurement models, shifting from short-term purchases to long-term contracts to lock in fiber resources in advance.
TrendForce noted that amid massive demand created by applications surrounding AI data centers, global fiber supply has been tight since the end of 2025, a situation expected to last at least until 2028.
On the supply side, global fiber capacity utilization has risen to 92% in 2026, while inventory levels have fallen from 4 months in 2024 to just 1 month. Orders at some major manufacturers have already been booked through the first quarter of 2027, indicating that existing capacity is nearing full load.
On the other hand, optical preform expansion involves the introduction of deposition equipment and process construction, with a build period of about 18 to 24 months. Even if manufacturers are now planning capacity expansions, new capacity will still take time to be released gradually, making it difficult to effectively increase supply in the short term.
On the demand side, global fiber demand is estimated to reach 577 million core kilometers in 2026, with growth momentum mainly coming from data center construction, which accounts for about 18% to 20% and is projected to rise to 30% to 35% in 2027.
In addition to large cloud service providers continuing to expand AI data centers, chip makers and telecom operators are also investing in related infrastructure, further driving fiber demand for data center interconnection and high-capacity backbone networks.
According to a TrendForce survey, the supply shortage has already driven up spot prices for finished optical fiber. For bend-insensitive fiber used in data center cabling, average prices in 2026 are expected to grow more than 5 times compared with 2025. AI backbone fiber used for data center interconnection and high-capacity backbone networks is seeing prices rise about 2.8 times year-on-year, while mainstream fiber for telecom services is also up about 3.7 times year-on-year.
With supply continuing to tighten, telecom operators have also begun securing future fiber supply through long-term contracts. For example, Verizon and Corning signed a multi-year supply agreement in September 2026, planning to obtain more than 129 million core kilometers (about 80 million miles) of high-density fiber and connectivity solutions between 2027 and 2032, supporting not only broadband construction but also the high-capacity backbone networks connecting AI data centers.
TrendForce believes that this round of fiber supply tightness stems from the continued expansion of new demand related to AI data centers, which differs from past telecom construction cycles. Given that supply is unlikely to increase quickly in the short term while demand grows steadily, the trend of telecom operators and large infrastructure players locking in fiber resources through long-term contracts in advance will become more common.
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