Over 95% of global cross-border data relies on submarine cables for transmission. Driven by the strong pull of generative AI and the large-scale deployment of global distributed computing clusters, the submarine cable industry is ushering in a new boom cycle. It is entering a new mid-to-long-term expansion track dominated by computing power interconnection and interoperability, and will witness a new construction peak in the next five years.
On August 10, the China Academy of Information and Communications Technology (CAICT) released the "Global Submarine Cable Industry Development Research Report (2026)". The report states that AI development brings new increments to regional submarine cable construction. The vigorous development of AI drives exponential growth in global intelligent computing demand, leading to an increasingly strong demand for international submarine cable interconnection, especially in the Asia-Pacific region. According to forecasts by Cushman & Wakefield, the data center colocation business in the Asia-Pacific region will surpass the United States to become the largest market before2030.
Moreover, constrained by hard constraints such as the clustered layout of traditional domestic data centers, tight land space at international submarine cable landing hubs, and pressure on power supply, new computing nodes will radiate outward to surrounding countries and regions, such as Malaysia and Thailand. Newly built computing centers urgently need to expand and build new submarine cable systems to construct a submarine cable network adapted to the new pattern of regional intelligent computing.
01What Factors Drive the New Growth Cycle?
Generally speaking, the design service life of submarine cables is usually 25 years. Based on this calculation, a large number of submarine cables will reach their design service life within the next five to ten years. Global submarine cables will continue to maintain a stable replacement of old with new, and the resulting demand for new submarine cables will rise steadily.
The report released by CAICT shows that it is estimated that 63 submarine cables, totaling about 270,000 kilometers, will reach their retirement age during the period from 2026 to 2030; and 83 submarine cables, totaling about 200,000 kilometers, will reach their retirement age during the period from 2031 to 2035. From a regional perspective, in the next decade, the number of submarine cables reaching retirement age within Asia and within Europe will account for more than 50% of the total, making them the "main battlefield" for the replacement of old and new international submarine cables.
Therefore, in terms of service life, in the next 5 to 10 years, about 500,000 kilometers of submarine cables will reach the end of their service life, driving new growth demand. CAICT predicts that during the period from 2026 to 2030, about 150 new submarine cable systems will be deployed globally, with the total length of newly built submarine cables exceeding 500,000 kilometers, and the market size reaching tens of billions of US dollars. Meanwhile, TeleGeography predicts that the global investment in newly built submarine cables from 2025 to 2027 will reach about 13 billion US dollars, almost twice the investment from 2022 to 2024.
AI traffic demand, typically represented by Tokens, is stimulating the growth of submarine cables. Report data shows that in the week since June 29, 2026, the total invocation volume of global AI large models reached 46.7 trillion Tokens, with over a dozen large models such as DeepSeekV4Flash, Mimo-v2.5, and MiniMaxM3 reaching the trillion-Token level in weekly invocation volume.
Currently, AI services are becoming a new business track leading regional traffic growth after Internet platforms, driving submarine cables to expand from carrying information interconnection and data transmission to AI interaction, bringing new business demand increments to international submarine cable construction. According to calculations, the capacity of a single fiber pair on the ALC submarine cable is 27 Tbps, which can transmit over 80 billion Tokens per second when converted according to industry equivalent traffic.
Submarine data centers are becoming an incremental market, driving the demand for submarine cables.
Traditional data centers require a large amount of land to build machine rooms, while submarine data centers can utilize deep-sea space, saving more than 90% of land and releasing land resources. In May 2026, the world's first offshore wind direct-connected submarine data center was officially put into operation in the East China Sea area of Lingang, Shanghai. A large number of servers and intelligent computing cabinets are deployed in the submarine data cabins, and the massive data generated by operations must be transmitted through optical fiber submarine cables.
In addition, the rapid penetration of video businesses such as short videos, micro-short dramas, and live streaming into emerging markets, as well as the surge in network interconnection demand for marine scenarios such as offshore oil and gas platforms, have also promoted the growth in demand for submarine cables.
In summary, the new round of submarine cable growth is jointly promoted and driven by factors such as service life, AI services, submarine data centers, and offshore application scenarios.
02How Should Chinese Submarine Cable Companies Seize the Opportunities?
The submarine cable track is not a blue ocean. In the domestic industrial chain alone, there is competition among companies such as ZTT (Zhongtian Technology), Hengtong Optic-Electric, HMN Tech (Huamai Communication), China Telecom, and YOFC (Yangtze Optical Fibre and Cable).
From the perspective of enterprises, Hengtong Optic-Electric is a leading enterprise in the field of submarine communication optical cables, possessing the ability to build transoceanic communication networks. It is also the only enterprise with full industry chain capabilities for transoceanic communication network system construction and project delivery experience of ultra-long-distance submarine cable systems of ten thousand kilometers. Hengtong Optic-Electric has also overcome three key industry technical difficulties: 10,000-kilometer optoelectronic transmission of submarine cable systems, pressure resistance and water/hydrogen tightness technology at a water depth of 10,000 meters, and 25-year ultra-high reliability. As of now, the total mileage of newly built submarine cable systems by Hengtong Optic-Electric globally has accumulated to over 100,000 kilometers, making it an important force in the construction of global marine communication networks.
ZTT is one of the earliest domestic enterprises to lay out submarine optical cables, possessing the capability of "optoelectronic integration". In 2004, ZTT Submarine Cable Co., Ltd. was established, with businesses covering the complete industrial chain of "submarine optical cables, submarine power cables, joint boxes, and underwater connecting devices". The 2025 annual report data shows that ZTT's marine series business achieved a revenue of 6.349 billion yuan, a substantial year-on-year increase of 74.25%, accounting for 12.09% of total revenue, with a gross profit margin of 23.83%; the revenue proportion of optical communication and network business is 14.04%. The synergistic efforts of these two high-gross-margin businesses have made them the core sectors with the strongest profit resilience and optimal growth for the company, fully benefiting from the industry dividends brought by global submarine cable upgrades, AI computing power network expansion, and offshore submarine data center construction.
Among operators, the "Asia Direct Cable (ADC) International Submarine Cable Project" initiated by China Telecom was officially put into operation in December 2024. With a total length of 9,988 kilometers, it is currently the submarine cable with the most fiber pairs and the highest transmission capacity in Asia. By the end of 2025, China Telecom participated in the investment and construction of more than 50 international submarine cables, and its international and Hong Kong, Macao, and Taiwan backbone transmission relay capacity reached 178T (of which more than 87T is in the direction of the "Belt and Road"), possessing 256 overseas Points of Presence (POP).
As a leading enterprise in the optical fiber and cable industry, YOFC, in terms of marine communication, has YOFC Ocean, which owns the world's highest 201.68-meter VCV vertical tower and a 50,000-ton-class dedicated wharf. It provides integrated services for submarine optical cables, power cables, optical-electrical composite cables, and engineering design and installation. A single submarine optical cable can be up to 100 km long with 144 fibers per tube, fully meeting the harsh submarine environment. In 2025, YOFC's overall operating revenue was 14.252 billion yuan. The marine business revenue was not disclosed, but reportedly YOFC is vigorously laying out the marine energy and engineering track.
In addition, HMN Tech stands out in intercontinental submarine cables. As one of the only four enterprises globally with the capability of general contracting for intercontinental submarine cables, the "PEACE International Submarine Cable System" contracted by HMN Tech has a total length of over 22,000 kilometers, connecting 12 countries across Asia, Africa, and Europe.
From the layout of Chinese enterprises, China has formed a complete and independent full industry chain system in the field of submarine cables. However, it should be noted that while China's submarine cable industry is rising rapidly, there are still shortcomings.
03Conclusion
Currently, high-end general contracting for global ultra-long-distance transoceanic backbone submarine cables, the formulation of international industry standards, and the iteration of cutting-edge deep-sea equipment are still dominated by a few overseas oligopolies. Although domestic enterprises have achieved a breakthrough in transoceanic EPC general contracting capabilities relying on HMN Tech, there is still room for improvement in the overall market share in global high-end intercontinental backbone projects and the construction of an ocean-wide operation and maintenance system.
In the future, China's submarine cable enterprises need to continue to cultivate core technologies, rely on differentiated advantages to explore the global market, amplify the competitiveness of the domestic submarine cable industry, seize opportunities in the new round of submarine cable growth cycle driven by AI, and seize core seats.
Editor-in-Charge / Layout: Sun Tian
Proofreader: Mei Yaxin
Supervisor: Liu Qicheng