In the first half of 2026, the global fiber optic cable market is undergoing a rapid transition—shifting from a "fiber core shortage" to a "fiber optic cable shortage." The industry's growth logic has gradually moved away from a model dominated by the investment cycles of traditional telecom operators, pivoting instead toward a new landscape driven by a dual-engine approach: the construction of AI computing infrastructure and the upgrading of energy and power communication networks. Against a backdrop of constrained production expansion on the supply side and sustained growth on the demand side, the overall vitality of the fiber optic cable industry chain has risen significantly, marking the market's entry into a new upward cycle.
## I. From Fiber Core Shortage to Fiber Optic Cable Shortage: Price Hike Effects Fully Transmitted Across the Value Chain
The current market rally originated primarily in the upstream segment of the fiber optic value chain—specifically, the fiber core stage.
As the core raw material for fiber optic manufacturing, the optical fiber preform (or "optical rod") captures approximately 70% of the entire industry chain's profit margin. This segment is characterized by high technical barriers and substantial capital investment, with production expansion cycles typically requiring 18 to 24 months. Following several years of industry consolidation and capacity rationalization, global preform production capacity is now operating near full utilization; major industry leaders are generally maintaining capacity utilization rates at around 100%.
This imbalance between supply and demand has directly triggered a sharp surge in fiber optic prices. At the beginning of 2026, the price for G.652.D single-mode fiber stood at less than 20 RMB per core-kilometer; by March, however, it had skyrocketed to 83.4 RMB per core-kilometer—an increase of over 400%—marking the most significant price rally observed in recent years.
As the shortage of upstream raw materials persists, cost pressures are rapidly being transmitted downstream to the fiber optic cable manufacturing segment.
A case in point is China Mobile's centralized procurement project for specialized fiber optic cables covering the 2026–2027 period: out of the eight winning bidders, seven submitted bids at the maximum allowable price ceiling. This outcome serves as a clear reflection of the current market reality—one characterized by an imbalance between supply and demand, and by fiber optic cable manufacturers holding full order books.
Concurrently, the maximum allowable price ceiling for Guangdong Telecom's GYTA-24 core fiber optic cables also surged from 1,245 RMB per sheath-kilometer at the start of the year to 2,500 RMB per sheath-kilometer—an increase exceeding 100%. Against the backdrop of persistently tight supply, optical cable manufacturers have seen a marked increase in their bargaining power, leading to an effective recovery in the industry's overall profitability.
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## II. Accelerated Construction of Power Communication Infrastructure: Simultaneous Advancement of Existing Network Optimization and New Construction
In addition to the new demand generated by AI data centers, the construction of domestic power communication networks is emerging as a significant driving force behind the growth in demand for optical cables.
Historically, power communication networks have relied primarily on OPGW cables (Optical Ground Wire) for their construction. Consequently, the sector's development is closely intertwined with Ultra-High Voltage (UHV) transmission projects, new energy grid-connection initiatives, and the digital upgrading of power grids.
Since the beginning of 2026, various regions across the country have successively launched power communication construction projects. Notably, key new energy hubs—such as Inner Mongolia, Xinjiang, and Gansu—have been actively conducting tenders for communication systems associated with grid-connection projects at voltage levels of 220kV and above. These tenders encompass the construction of communication facilities within substations, communication networks along transmission lines, and dispatch data transmission systems, thereby further stimulating the demand for OPGW cables.
Concurrently, the industry has begun exploring more efficient models for resource utilization.
Recently, the Putian Power Supply Company in Fujian Province successfully commissioned the province's first demonstration project for integrated communication within a power transmission environment. This project innovatively revitalizes the surplus fiber cores within existing OPGW cables; by deploying multi-service shared splice boxes along 500kV backbone transmission lines, it enables the dynamic sharing of fiber core resources across various communication services.
This approach breaks away from the traditional fixed-configuration model—where "one service occupies one fiber core"—and significantly enhances fiber core utilization efficiency. While simultaneously reducing the need for new capital investment, it also helps alleviate the current strain on optical cable resources, offering a fresh perspective and new development pathways for the future construction of power communication networks.
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## III. AI Computing Demand Emerges as a New Engine for Industry Growth
Unlike traditional communication network construction, the deeper driving force behind the current surge in demand for optical cables stems from the global boom in the AI industry.
As the scale of large-scale AI model training continues to expand—and as the construction of cloud computing centers, intelligent computing centers, and supercomputing centers accelerates—high-speed optical interconnects have become an indispensable and critical component of AI infrastructure.
This is particularly evident in high-speed transmission scenarios both within and between data centers, where the demand for low-loss, high-capacity optical fibers continues to rise. With its advantages of longer transmission distances, lower attenuation, and higher bandwidth, G.654.E ultra-low-loss optical fiber is emerging as a key choice for interconnecting AI data centers. Meanwhile, high-bend-performance fibers—such as G.657.A2—are being widely deployed in complex cabling environments and specialized scenarios.
The construction of AI computing networks is creating new avenues for growth for high-end optical fiber and cable products, while simultaneously driving a continuous structural upgrade within the industry's product portfolio.
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## IV. Market Outlook for the Second Half of the Year: The Trend of Rising Volume and Prices Is Expected to Continue
Looking ahead to the second half of 2026, the overall optical fiber and cable market is expected to maintain a high level of prosperity, characterized by the following two key features:
### 1. Supply-Demand Gap Unlikely to Ease Soon; Prices to Remain at Elevated Levels
Due to the lengthy expansion cycles for optical preforms—resulting in a limited pace of new capacity release—and the sustained growth in demand from AI data centers, power communication networks, and supporting infrastructure for new energy projects, the industry's supply-demand dynamics are unlikely to reach equilibrium in the short term.
Market forecasts suggest that the annual demand shortfall for optical fiber could approach 100 million core-kilometers. Consequently, prices are expected to continue fluctuating at elevated levels, and the industry's profitability is poised for further improvement.
### 2. Accelerated Product Structure Upgrades; Significant Premiums for High-End Products
The market in the coming period is expected to exhibit a more pronounced structural differentiation:
* **G.654.E Optical Fiber & Cable:** Benefiting from the construction of AI computing centers and ultra-high-speed backbone networks, demand is experiencing rapid growth.
* **G.657.A2 Optical Fiber & Cable:** Widely utilized in complex cabling environments and specialized scenarios, these products continue to command high added value.
* **OPGW Cables:** Driven by the grid integration of new energy sources and the digitalization of power grids, demand for these cables continues to expand.
* **Traditional G.652.D Cables:** Although demand remains stable, supply continues to be tight as upstream resources are increasingly prioritized for high-end product lines.
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## Summary
In 2026, the optical cable market is experiencing a broad-based surge in prosperity across the entire value chain, triggered by a shortage of upstream fiber cores. From the massive demand for computing interconnectivity generated by AI data center construction to the sustained incremental market opportunities arising from upgrades to new energy and power communication infrastructure, the fundamental drivers of the industry's development have undergone a profound transformation. Driven by the dual forces of constrained supply and expanding demand, the optical fiber and cable industry is entering a new phase characterized by simultaneous growth in both volume and price. Moving forward, high-end, intelligent, and energy-digitalization-related products are poised to become the core drivers of industry growth; consequently, companies possessing an integrated layout spanning optical preforms, fibers, and cables—along with advanced R&D capabilities for high-end products—will be best positioned to capitalize on the dividends generated by this current industry boom cycle.
Post time: 2026-06-02 17:50:42