Everbright Securities: AI Inflation Spawns New Cycle, Optical Fiber & Copper-Clad Laminate Price Increases Drive Industry Company Performance Growth

Report Summary

Event:

Fiber optic cable prices have been rising sharply since early 2026, with operators’ bulk procurement prices for optical cables continuing to increase.

According to “Fiber Online” data, as of March 4, prices for various types of fiber exceeded expectations. The price of G.652.D single-mode fiber increased from 18 yuan per core-kilometer before New Year’s Day to 85-120 yuan per core-kilometer; G.657.A2 rose from 35 yuan per core-kilometer to 210-230 yuan per core-kilometer. Due to the ongoing rise in fiber optic cable prices, suppliers face challenges in bidding for operator bulk procurement projects where market quotes surpass the maximum price limit, leading to multiple project cancellations. From successful procurement cases, the current market transaction prices for fiber optic cables are rising rapidly: In March 2026, Chongqing Telecom’s emergency procurement project for fiber cables for 2026 introduced a single-mode G.657A21B6a2 fiber cable with a maximum response limit price of 350 yuan per kilometer (excluding tax) after two price increases, and the project was successfully awarded. The winning bids were 268 yuan per kilometer (First bidder: Zhongya Communications, 60% share) and 323 yuan per kilometer (Second bidder: Hengtong Optoelectronics, 40% share).

Fiber optic cable price increases are driven by a “triple effect” of “AI construction demand,” “raw material optical rod shortages,” and “drone fiber demand.”

1. The demand for high-speed transmission in AI data centers is boosting high-end fiber demand.
2. Tight supply of preform rods for fiber, with long expansion cycles: Leading Chinese fiber companies’ preform production lines are operating at full capacity. Due to high investment, technical barriers, and lengthy approval processes, expansion typically takes 1.5 to 2 years, so fiber prices are expected to remain high in the short term.
3. Drones also contribute to demand: Compared to traditional RF drones, fiber optic drones offer interference-resistant communication, high bandwidth and low latency, enhanced security, and extended endurance. Each drone equipped with 10-40 km bend-resistant fiber (G.657.A2) further increases fiber demand and pushes fiber prices higher.

Overseas fiber optic industry companies actively respond to market growth driven by AI data centers, with stock prices entering an upward trend.

Since the beginning of the year (up to March 11), Corning, Furukawa Electric, Sumitomo Electric, and Fushun have seen stock price increases of 50.8%, 197.2%, 69.4%, and 47.1%, respectively. Recent order and expansion signals from these companies are positive:

1. On January 27, 2026, Corning signed a $6 billion fiber supply agreement with Meta to support Meta’s data center construction, including major capacity expansion at its Hickory fiber manufacturing plant. Corning’s CEO also revealed in an CNBC interview that Meta alone needs 8 million miles of fiber for its Hyperion data center in Louisiana.
2. Sumitomo Electric’s president explicitly stated in the New Year’s address that the company aims to expand production of fiber and optical devices to meet the surge in data center demand.
3. Major North American telecom operators AT&T and Verizon are actively deploying new fiber networks for the AI era. On March 10, AT&T announced a five-year investment plan to invest over $250 billion in the U.S. to expand high-speed fiber and wireless coverage.

Risk warnings:

• Unexpectedly hawkish Federal Reserve policies
• AI technology iteration slower than expected
• Fiber optic cable demand weaker than expected
• Copper-clad laminate demand weaker than expected
• Significant market sentiment decline
• Company performance realization slower than expected

(Source: Everbright Securities)