Optical Fiber Sector Sees 650% Price Surge with Volume Growth, High Demand Expected Through 2027

The domestic optical fiber industry has experienced a rare period of simultaneous price and volume growth this year, with certain fiber types seeing prices surge by 650% compared to the same period last year. Leading companies have reported production and sales volumes increasing several times year-on-year, with order backlogs extending into the first quarter of next year. According to reports, an executive from a fiber manufacturer in Jiangsu revealed that the price of G.657.A2 fiber has skyrocketed from 32 yuan per core kilometer last year to 240 yuan, marking a 650% increase. The spot price of mainstream G.652.D single-mode fiber has also risen sharply. Data from CRU shows the price of this variety climbed from under 20 yuan per core kilometer in early 2025 to 83.4 yuan per core kilometer by March 2026, a cumulative increase exceeding 400%.

Alongside the price surge, optical fiber production and sales volumes have also exploded. Jiangsu Hengtong Optical Fiber Technology Co., Ltd. reported that its first-quarter fiber product output and sales volume increased by over 35% year-on-year, with overseas sales growth exceeding 55%. Exports are primarily directed toward North America and Southeast Asia. Hengtong stated that current order backlogs are substantial, with production schedules already filled through the first quarter of next year. Another Jiangsu-based fiber company, Tongding Group, saw production and sales volumes increase nearly fivefold year-on-year in the first quarter.

Analysts suggest the core driver of this price surge is not only explosive demand but also rigid constraints on the supply side. The key barrier in optical fiber production lies upstream with the fiber preform, which has a lengthy expansion cycle of 1.5 to 2 years, high technical barriers, and requires significant investment. Furthermore, a large number of small and medium-sized manufacturers cleared capacity during the previous industry downturn, while leading players were cautious about expansion, leading to a severe shortage in global supply capacity.

From the current supply-demand perspective, the industry's high prosperity is expected to last at least until the end of 2027. On the demand side, the development of AI computing power is still in its early stages, and the need for global data center construction and overseas communication infrastructure upgrades possesses long-term sustainability. On the supply side, the long expansion cycle for preform capacity means the earliest new capacity from leading manufacturers will only come online by 2027, with overseas giants having no expansion plans before 2028. The supply-demand imbalance is unlikely to reverse in the short term.

Soaring fiber prices have driven significant gains for related stocks. In the Hong Kong market, YOFC (06869) rose over 333% in 2025 and has gained nearly 300% again this year. TRANSTECH (09963) increased nearly 220% in 2025 and has added nearly 400% year-to-date. Kaiyuan Securities indicated that AI is taking over from telecom demand, propelling the global optical fiber market into a cycle of rising volume and price. CRU forecasts global fiber demand will climb to 880 million core kilometers by 2027. The price increase trend has spread globally, with similar product prices in the European market rising 136% month-on-month from January and 159% year-on-year. The supply-demand gap is projected to potentially widen to 15% during 2026-2027.

Great Wall Fund believes that in 2026, the optical fiber industry, under the combined influence of three inflection points - the explosion in AI computing power demand, rigid supply constraints, and a price reversal - is entering a strong cycle. The sector is transitioning from cyclical stocks to cyclical growth stocks, with the entire optical communication产业链 offering high-certainty investment opportunities throughout the year. Key areas of focus include preforms, high-end optical fibers, and optical chips/modules, though risks such as AI adoption falling short of expectations warrant caution.

Related concept stocks: YOFC (06869): The absolute global leader in optical fiber, ranking first in global fiber sales for nine consecutive years with a 13% global market share. It is the only company globally mastering the three major preform fabrication techniques (PCVD, OVD, VAD), building a full industry chain barrier from "preform-fiber-cable" with 100% self-sufficiency in preforms and the world's largest production capacity. The company's annual fiber production capacity exceeds 60 million core kilometers and it is a core supplier for domestic operator centralized procurement. In the G.654.E ultra-low loss high-end fiber market, the company holds an 80%-90% market share, positioning it to benefit fully from the explosion in demand for high-end fibers for AI computing.

TRANSTECH (09963): The company announced on April 13th its intention to acquire Haomin Investment Holdings Limited for approximately 78 million yuan. As of the announcement date, the target company indirectly holds a 51% stake in a Hangzhou-based company primarily engaged in the production and sale of optical fiber preforms and fibers in China. Its products are supplied to both independent customers and TRANSTECH's controlling shareholder, Futong China. Optical fiber is a key material for downstream cable production.

TIME INTERCON (01729): The company is a core domestic supplier of MPO connectors for Google, with growth drivers from computing power, automotive, and medical sectors promising medium to long-term growth. Looking ahead, robust AI computing power demand is expected to support continued growth in the company's MPO, server, and high-speed copper cable businesses. Industrial Securities noted that the company's core customer base is tied to leading overseas cloud providers. Its optical interconnect products, primarily high-density fiber solutions like MPO, are currently the main revenue source and have steadily entered the supply chain of a major North American customer, with plans to further strengthen this supply chain advantage.