Global Optical Fiber in Crisis! "Price Changes Daily," Supply Shortage Reaches 30%! China's 4 Giants Monopolize 60% of Market!

On February 8th, I wrote an in-depth research report titled: [Tao Gu Ba]
“Global Fiber Optic Gap 30%-40%! Price ‘Day-by-Day’, Is the Next CPO Market Coming?”
At the time, it triggered a lot of criticism, with people saying we were talking at a high point!

But any trend or industry, only when it explodes can people truly see it!
Our focus isn’t just on value, but on future growth and explosive potential!

Good products aren’t cheap, and cheap products aren’t good! This is the essence of business!
This week, fiber optic cables surged again across the board, especially after a sharp decline, continuing to rebound, which proves our judgment was correct!
Research is to better identify value, then wait for the right entry point and risk control. Not chasing immediately. We hope everyone can understand and be tolerant of us! Thank you!

1. Event-Driven! Why Are Global Fiber Optic Prices Rising?

Core Signal: Three major landmark events confirm industry reversal, breaking through the price ceiling.

1. Overseas giants’ capacity tightens, Corning implies price hikes:
   Event: Global fiber optic leader Corning and Fujikura’s capacity utilization has reached 100%, with no new capacity released before 2028.
   Signal: Corning long-term contract price increases: 657A1: $7-8 → $11, 657A2: $15-18 → $20-25!

2. Heilongjiang Telecom’s bidding sets new historical high, with over 200% increase:

Event: In March 2026, Heilongjiang Telecom issued emergency procurement, with G.652.D 24-core fiber optic cable capped at about 155.7 RMB per km (tax included 130 RMB).
Signal: Compared to late 2025 bottom price (~56 RMB per km), up 178%; compared to Tianjin Telecom’s bid (46 RMB per km), up 239%. The sharp breakthrough in emergency procurement caps is the most direct evidence of urgent demand and increased price acceptance in the industry.
3. High-end special optical fiber prices break historical ceiling:
Event: Driven by demand from drone, AI data centers (AIDC), etc., G.657.A2 fiber prices have exceeded 210 RMB per km, with some premium units even surpassing 250 RMB per km.
Signal: High-end products in short supply, price system restructuring. Traditional fiber prices have bottomed out, with high-end products leading the “volume and price increase” phase.

2. Logic Behind Price Hikes and Their Far-Reaching Impact

Core Logic: Mismatch in supply-demand cycle + technological upgrades drive industry from “bottoming out” to “profit explosion”.

1. Price hike logic: Capacity expansion cycle > demand explosion cycle mismatch:
   Fiber preform (fiber rod) expansion takes 1.5-2 years, while AI computing power and overseas demand explode instantly. By 2026, no new capacity is effectively added, but demand is expected to grow over 25%, creating a demand-supply gap of 138 million km (gap ratio 16.7%).
   Cost rigidity: Fiber preform costs are relatively fixed (~35 RMB per km), so almost all price increases translate into gross profit.

2. Far-reaching impact: Profit elasticity far exceeds revenue elasticity, with gross profit doubling:
   Estimates show gross profit per km can jump from 6 RMB at the bottom to an expected 110 RMB, a 1733% increase.
   Market structure optimization: Small and medium manufacturers face capital and approval constraints, with low expansion willingness; leading firms leverage fiber preform self-sufficiency and overseas deployment, capturing most of the profit from price increases, further increasing industry concentration.
   Valuation reshaping: Industry shifts from “cyclical manufacturing” to “core assets of computing infrastructure,” with valuation systems likely to benchmark AI computing hardware segments.

3. Overview of Logic: Four-Level Progressive Framework

Investment main line: From industry beta to individual stock alpha, validated through four levels.

4. Demand Side — Four Major Usage Scenarios Growth

Demand structure undergoes fundamental change: shifting from “operator-driven” to “AI + overseas + special scenarios” multi-wave resonance.
(1) AI Data Centers: Core growth driver
Technological breakthrough: commercialization of hollow optical fiber. Longi Fiber helped establish the world’s first 800G hollow fiber transmission test network; Zhongtian Technology’s hollow fiber attenuation <0.1dB/km, with mass supply.
Demand surge: AI computing centers require latency <100 microseconds; hollow fiber is the key compatible product. A single GPU cluster with tens of thousands of cards needs tens of thousands of km of fiber, with hollow fiber’s share expected to rise above 20%.
Data validation: AI-driven data center fiber demand share could surge from <5% in 2024 to 35% in 2027. In 2025, global fiber shipments reached 662 million km (+15.3%), with China accounting for 56.3%.
(2) Operator Networks: Steady upgrade of fundamentals

Network evolution: F5G-A all-optical network construction accelerates, with upgrades across trunk lines, metro networks, and access networks.
Procurement increase: Domestic three major operators’ capital expenditure in 2026 will tilt toward optical communications, with fiber procurement expected to grow over 20% year-on-year.

5G deepening: By end of 2025, China’s 5G base stations will reach 4.838 million (37.6%), with ongoing construction driving demand for basic optical fiber.

(3) Overseas Market: Significant opportunities for domestic manufacturers
Supply-demand imbalance: North American data center fiber shortages; Corning and Fujikura capacity maxed out with no new capacity before 2028.
Export growth: Longi’s overseas revenue in H1 2025 was 2.7 billion RMB (+52.8%), accounting for 42.3%. Hengtong Optoelectronics’ Mexico plant launched, overseas orders continue to break through.
Product premium: 657A1/A2 series fibers are in strong overseas demand, with sustained price increases.
(4) Special Scenarios: New high-margin blue ocean
Scenario expansion: Unmanned drones (G.657 series in high demand), industrial (first TSN technology industrial XGS PON), automotive (V-PON solutions).
Growth certainty: Special scenario growth is expected at 35% in 2026, with gross margins significantly higher than regular cables.
Demand growth forecast table:

5. Supply Side — Capacity Cannot Keep Up with Demand Growth, Leading to Major Gaps!

How big is the gap? The global supply-demand imbalance is unprecedented! The gap will continue to widen until 2027.

1. Global supply-demand gap estimate (unit: billion km/year)

Detailed estimate:

2. Why will the gap keep expanding?

1. Demand side: Irreversible triple explosion
   AI data center demand explosion: A single 10,000-card AI cluster needs 100,000 km of fiber; over 50 new AI clusters globally in 2026 → demand exceeds 5 million km (+100% over 2025)
   Key validation: Capacity of Corning, Fujikura, Preformed fiber in Q2 2025 is fully booked, with purchases from China, proving AI demand has spilled over globally.
   Unmanned drone private network demand exceeds expectations: Cru data shows 50 million km demand in 2025 → 80 million+ km in 2026 (+60%), possibly higher (top companies like DJI/YH demand not fully counted).
   US Bead project acceleration: Federal funding of $60 billion, requiring 100% fiber coverage, with demand reaching 40 million km in 2026 (5% of global).

2. Supply side: Capacity expansion increasingly difficult
   Fiber preform capacity bottleneck: Core in “preform,” accounting for 60% of cost, requiring huge investment (over 2 billion RMB for 10,000 tons capacity), long cycle (2-3 years).
   Current maximum capacity:
   Domestic four major preform producers: 48,000 tons/year → fiber capacity about 500 million km/year.
   Industry maximum: via “extrusion process,” can expand another 10-15% → 550-575 million km.
   New capacity dilemma:
   Since Q3 2025, no new preform capacity plans (long ROI).
   International giants like Corning and Fujikura are at full capacity since Q2 2025, shifting procurement to China.
   Key conclusion: A shortage over 10% usually causes price increases of 50%+, and this gap is 16.4%, explaining why 657A2 prices broke 100 RMB/km (up from 40 RMB at the low point in 2024, a 150% increase). The gap will persist until late 2027, as fiber preform capacity expansion peaks around then.

Core contradiction: Capacity lagging behind demand explosion, with peak gap expected in 2026.
3. Capacity expansion cycle:

4. Leading manufacturers’ capacity status survey

6. Why Is This the “Next CPO Market”?

Fiber optic cables and CPO markets are highly aligned in demand drivers, supply constraints, price elasticity, and market rhythm, but fiber has stronger demand resilience and tighter supply constraints:
Demand: CPO relies only on internal AI data center interconnects, while fiber covers “AI cluster interconnect + operator backbone + overseas infrastructure + special scenarios,” with broader, more resilient demand.
Supply: Fiber preform expansion cycle is 2-3 years (CPO is 12-18 months), with more raw material constraints, making supply rigidity much higher than CPO.
Price elasticity: Industry gross margin is only 18-22%, with 50%+ room for recovery from the high point (>30%), far exceeding CPO (current gross margin ~40%, less than 20% room for recovery).
Market rhythm: Currently at a “transition from divergence validation to explosive acceleration,” with a performance inflection point expected in Q1 2026.
Industry quote: If CPO is the “neuron” of AI computing power, then fiber is the “vascular network” of the AI era—without blood vessels, even the strongest neurons can’t survive!

7. Beneficiary Companies:

Top 10 global fiber optic cable companies’ market share

Domestic related companies:

Summary: Fiber optic cables are not just a simple “price increase cycle,” but a fundamental restructuring of demand:

1. Operator share declines (<40%), with AI, drones, and overseas markets becoming dominant, shifting pricing power.
2. Fiber preform capacity bottlenecks mean the price increase is not a short-term pulse but a sustained 2-3 year dividend.
3. China’s industry chain, leveraging cost and technological advantages, has become the biggest winner in global computing infrastructure.
   After reading, do you understand whether this industry’s explosion is driven by trend industries? Is this sustainable? How should one act? Who are the leaders? Why them? (Industry thinking, not market advice! Not a recommendation!)
   Like + share + comment: Global fiber optic shortage! “Day-by-day pricing,” with a 30% gap! China’s 4 giants monopolize 60% of the market!

The above is just my personal trading review and reflection. Investment involves risks; trade cautiously! Plans are always outpaced by market changes. All content reflects personal thoughts and records, serving as a record of my understanding of the market, for personal sharing only. It does not constitute any investment advice. Trade at your own risk!
(Research and compilation are not easy; your likes, shares, and comments are our motivation. Thank you!)

Overall market: Today’s market rebounded further, but the stop-loss at 3950 was not broken through, indicating resistance at this level. Tomorrow may see a correction. The key focus around April 3rd next week, followed by overall oscillation and rebound. Expect future fluctuations within the 3950–3794 range. Today’s trading volume expanded by about 100 billion, indicating structural development. Our judgment is that the turning point will be around the 25th, with a view to see a reversal by the 1st. It’s advisable to keep positions around 50% in the coming days. Learning to take profits timely is crucial!

Market sentiment: Sentiment recovery with 84 limit-ups, 1 limit-down, 86% limit-up rate, 8 stocks hitting daily limit-ups with 7 consecutive boards.
Sector focus: The current main theme is power, with the strongest sectors being power + fiber optics + computing infrastructure! Power is the main theme, and technology is the strongest offensive thinking!
Supporting sectors: Optical communication + Fujian + sports + robotics!
Power: Leading stock Huadian with 8 limit-ups, Huadian and Shao Neng have shown 3 limit-ups, continuing to rotate and strengthen.
Fiber optics: Leading stock Zhongli with 4 limit-ups, new energy sector, Tongding with 2, showing high volatility! Also, Feichang and Tefa reflect value-driven thinking.
Computing infrastructure: Leading stock Aorui with 6 days of 4 limit-ups, and Zhen Shi with 2 limit-ups, indicating further growth potential. Overall, continuous re-accumulation is key, breaking the small-volume pattern!
Success has no shortcuts—only discipline and persistence! Wishing everyone on the path of effort, the more you work, the luckier you get!

Today’s Highlights:

1. Fiber optics: Driven by drone and AIDC demand, G.657.A2 fiber prices have surpassed 210 RMB/km, breaking historical price ceilings.
2. Storage: Nomura sharply raises expectations for storage chip price increases, with Q2 DRAM and NAND expected to grow 51% and 50% month-on-month.
3. COSCO Shipping: Resumes new bookings from Far East to Saudi Arabia, Iraq, and other Middle Eastern countries.
4. National Energy Administration: By end of February, total installed power capacity reached 3.95 billion kW, up 15.9% year-on-year.

Tracked Commodity Themes

Livestock: Pig price at 10.14 RMB (-0.49%), piglet cost 12 RMB, feed over 50%, labor 10-15%.
Batteries & Lithium: Lithium carbonate at 154,000 RMB (+4.05%), salt lake costs 30,000-40,000 RMB, Mica 60,000-90,000 RMB, spodumene 60,000-80,000 RMB.
Rare Earths: Praseodymium-Neodymium at 71.25 million RMB (0%), NdFeB N35 at 1.695 million RMB (0%), light cost 350,000-400,000 RMB, MP79, Australia 450,000-500,000 RMB. Mining: 8,000–10,000 RMB/ton, heavy rare earths 1.3–1.5 million RMB/ton.
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