# The demand gap for single-mode fiber is widening, and prices are soaring.

Since the beginning of 2026, the global single-mode fiber market has witnessed a historic turning point. As the core transmission medium for communication networks, the price of G.652.D single-mode fiber has surged from 20 yuan per fiber-kilometer to 50 yuan per fiber-kilometer within just one month, reaching a new high in nearly seven years. This price surge—driven by an imbalance between supply and demand—is reshaping the competitive landscape of the fiber-optic cable industry and propelling it into a new round of prosperity.

## Escalating Supply-Demand Discrepancy: The Gap Exceeds 100 Million Chip-Kilometers

The global fiber-optic market is facing an unprecedented supply-demand mismatch. According to the latest data from CRU, the global fiber-optic demand gap is projected to reach 180 million fiber-kilometers by 2026, accounting for 16.4% of the total market volume—a gap that has expanded more than threefold compared to the 2017-2018 cycle. The Chinese market has become the focal point of this contradiction: in January 2026 alone, the price of G.652.D optical fiber rose by over 75%, with some manufacturers quoting prices exceeding 50 yuan per fiber-kilometer, whereas the price during the same period in 2025 was only 18-19 yuan per fiber-kilometer.

The demand side is experiencing explosive growth:

1. The AI computing power revolution is driving massive demand. Meta’s $6 billion order for optical cables for AI data centers, signed with Corning, is equivalent to Corning’s entire 2025 revenue from the optical communications business. A single cluster of 10,000 GPUs consumes fiber optic cable at a rate 17 times higher than in traditional scenarios, sharply boosting demand for high-end fibers such as G.654.E.

2. The military drone market has emerged as a rising star. The ongoing Russia-Ukraine conflict continues to fuel demand for FPV drone communications, and G.657A2 optical fiber—thanks to its exceptional bend resistance—has become the standard equipment on battlefields. Its drawing efficiency is 10%–15% lower than that of G.652.D fiber, further squeezing the production capacity of conventional optical fibers.

3. New infrastructure projects are accelerating their implementation. Projects such as China’s ultra-high-voltage power grids and high-speed railway trunk lines are increasingly adopting G.654.E optical fibers on a large scale. For China Telecom, the centralized procurement volume for Tier-1 trunk lines from 2026 to 2027 will only meet about half a year’s demand.

The supply side, meanwhile, is caught in a structural dilemma:

As the core raw material, optical fiber preforms have a capacity expansion cycle lasting 18 to 24 months. Currently, global preform capacity utilization has reached 100%, and the production lines of China’s four leading enterprises are operating at full capacity. Overseas manufacturers such as Corning and Fujikura of Japan have shifted their procurement toward China. Even more serious is that, starting from the third quarter of 2025, no new preform capacity expansion plans have been announced globally, and the supply gap will persist until the end of 2027.

## Price Transmission Mechanism: From Regional to Global Scope

This round of price increases exhibits significant asymmetric characteristics:

The Chinese market is leading the global rebound, with prices rising 10.8% month-on-month in January, pushing the price index to a new high in nearly three years. This surge is driven by the scale advantages of Chinese manufacturers—64% of the world’s fiber-optic capacity is concentrated in China, and export premiums reach 10% to 15%. As the North American market experiences supply shortages due to Congneng’s capacity saturation, Chinese manufacturers have become the primary recipients of spillover demand. In 2025, China’s exports of optical fibers and cables increased by 44.1% year-on-year.

Price transmission triggers a chain reaction:

1. The bulk fiber market was the first to see price increases. Before the 2026 Spring Festival, a surge in stockpiling drove up bulk fiber prices by more than 5% in a single day, leading to a situation where prices were available but markets were empty.

2. Operators are being forced to raise prices in centralized procurement. In 2025, China Mobile’s average centralized procurement price was 53.85 yuan per core-kilometer. Currently, the spot price of single-mode fiber has far exceeded the centralized procurement price, compelling China Telecom and China Mobile to launch a new round of centralized procurement characterized by both higher volumes and higher prices.

3. The prices of specialty optical fibers are spiraling out of control. The price of G.657A2 optical fiber has exceeded 100 yuan per core-kilometer, a 150% increase from its 2024 low point. For some orders, customers are required to pay the full amount upfront to secure production capacity.

## Industry Restructuring: From Cyclical Rebound to Value Reassessment

This supply-and-demand revolution is reshaping the industry ecosystem:

1. The competitive landscape is undergoing an upgrade. The era of low-price competition is coming to an end, as leading companies are building moats through technological barriers. Yangtze Optical Fibre and Cable has won the bid for Guangdong Unicom’s centralized procurement of hollow-core optical fibers, while Hengtong Optic-Electric is expanding its single-mode fiber production capacity to meet the demands of AI computing clusters, thereby creating a dual advantage of “premium pricing for high-end products plus economies of scale.”

2. Optimization of capacity structure: Midstream manufacturers are accelerating the phasing out of outdated production capacities, and second-tier companies are shifting 30% of their G.652.D capacity toward the production of specialty optical fibers. Although this structural adjustment has intensified the shortage of conventional optical fibers, it has driven the industry’s gross profit margin from 12% in 2024 to 25% by 2026.

3. The global landscape is undergoing a reshuffle. Chinese manufacturers’ global market share has surged from 50% in 2024 to 58.5% in 2026, while U.S. manufacturers have seen a significant increase in their import dependency due to demand from the Bead project.

## Future Outlook: Opportunities and Challenges in a Strong Cyclical Environment

Institutions predict that the global fiber-optic market will remain volatile at a high level in 2026, with prices of standard optical fibers continuing to rebound and prices of high-end fibers rising by 20% to 30%. However, the industry also faces three major risks:

1. Risk of overcapacity competition. If preform production capacity is concentratedly released by the end of 2027, it could trigger a new round of price wars.

2. The threat of technological substitution. Hollow-core fiber offers a 40% improvement in transmission efficiency compared to conventional optical fibers, and Microsoft and AWS have already begun deploying it. If large-scale production can be achieved, this will disrupt the current market landscape.

3. Volatility in trade policies. Discussions about the U.S. imposing additional tariffs on optical fiber preforms could disrupt the fragile balance of global supply chains.

In this industrial transformation driven by AI computing power, the fiber-optic cable industry is shifting from being merely an infrastructure supplier to a provider of high-value solutions. As prices return to a more rational range, only those companies with genuine technological expertise and production capacity flexibility will secure a long-term competitive edge in this supercycle.