On September 16, optical fiber concept stocks surged collectively. Zesum Technology hit the 20% daily limit up, while Sinochem International, Colibri Technologies, Etern Company Limited, GRINM Advanced Materials, and others hit the daily limit up. EverProX Technologies, Jpt Opto-Electronics, Ceyear, and others surged over 10%.
A few days ago, the centralized procurement price for China Mobile's ordinary optical cable products saw an actual price increase of 90% compared to the previous round, with unit prices rising significantly. Meanwhile, Corning signed a multi-year high-density optical fiber supply agreement with the U.S. telecom operator Verizon, with the order valued at billions of U.S. dollars.
Amid the AI (Artificial Intelligence) wave, the optical fiber and cable industry has shifted from the traditional telecom cycle to a brand-new cycle driven by AI computing power, transforming from a "supporting role" into the "leading role".
Volume and Price Rise Together; Supply-Demand Tightness to Extend to the End of 2027
Driven by the surging demand for AI computing power, the prosperity of the optical fiber and cable industry continues to rise. Since the fourth quarter of 2025, optical fiber prices have been steadily climbing, presenting an operational trend of improving demand and tight supply.
The premium pricing capability of products continues to stand out. The tax-inclusive price of G.652.D optical fiber has surged significantly from CNY 25 per fiber-kilometer in the fourth quarter of last year to over CNY 100 per fiber-kilometer today; the price of G.657.A2 optical fiber has skyrocketed from CNY 32 per fiber-kilometer a year ago to CNY 240, an increase of 650%. Orders for major Chinese optical fiber manufacturers are now booked until early 2027.
The performance of companies in the industrial chain has soared collectively. In the first half of this year, YOFC (Yangtze Optical Fibre and Cable)'s net profit attributable to shareholders reached CNY 2.925 billion, a year-on-year surge of 888.88%; Hengtong Optic-Electric's revenue hit CNY 42.026 billion, up 31.13% year-on-year; ZTT (Zhongtian Technology) achieved a revenue of CNY 30.939 billion in the first half of the year, a year-on-year increase of 31.10%. The "Yi-Zhong-Tian" combination of A-share optical module companies—Innolight, Eoptolink, and T&S Communications—secured a total revenue of CNY 65.52 billion and a net profit attributable to shareholders of CNY 22.38 billion, with an average daily profit exceeding CNY 120 million.
Overseas sales of domestically produced optical fibers have also grown substantially. According to statistics, Chinese manufacturers currently account for over 60% of the global optical fiber and cable market, and 70% of the world's optical fiber preform and optical fiber capacity is concentrated in China. Taking YOFC as an example, its optical fiber preform self-sufficiency rate has reached 100%, and its market share in high-end G.654.E optical fibers is as high as 80% to 90%.
At the industry level, the signal of "volume and price rising together" continues to materialize. China Mobile's centralized procurement of ordinary optical cables for 2026 to 2027 was recently finalized, with a procurement scale of approximately 2.1618 million sheath-kilometers. All 17 manufacturers quoted at the maximum price limit. Calculated based on the total winning bid price, the average price of ordinary cables is about CNY 102.56 per fiber-kilometer, a significant increase of about 90% compared to the previous procurement round.
Recently, global optical fiber giant Corning, following the announcement of a long-term agreement to supply data center interconnect optical fibers to Zayo, immediately signed a multi-billion-U.S.-dollar supply agreement with Verizon. It will provide over 80 million miles of high-density optical fiber before 2032, as operators' demand continues to be released.
China Galaxy Securities pointed out that optical preforms account for about 70% of optical fiber manufacturing costs, and the capacity expansion cycle generally reaches 18 to 24 months. The tight balance pattern is expected to last until at least the end of 2027. The institution believes that the price increase in China Mobile's centralized procurement indicates that the industry is bidding farewell to low-price involution and shifting to cost-based pricing, with AI computing power being the core driver of this round of prosperity recovery.
Industry Enters AI Cycle, with Opportunities and Challenges Coexisting
Currently, the industry's demand logic is undergoing fundamental changes. In the past, optical fiber demand was mainly driven by 5G construction and Fiber to the Home (FTTH). Today, high-speed interconnection within intelligent computing centers and interconnection between data centers have opened up entirely new incremental space. In 2025, the global data center optical fiber and cable demand grew by 75.9% year-on-year, reaching 69.6 million fiber-kilometers, and is expected to exceed 100 million fiber-kilometers in 2026. Industrial demand is shifting from Fiber to the Home (FTTH) to Fiber to the GPU (FTTG).
According to Gartner's forecast, global AI infrastructure investment will reach CNY 9.34 trillion in 2026, a year-on-year increase of 42%; it will further climb to CNY 11.94 trillion in 2027, an increase of 28%. This unprecedented influx of capital is fundamentally reshaping the demand landscape of underlying network infrastructure, with optical fiber serving as a critical cornerstone for its construction.
A combination of policies for the "15th Five-Year Plan" has also been intensively rolled out. On September 15, the MIIT (Ministry of Industry and Information Technology) and the NDRC (National Development and Reform Commission) jointly issued the "15th Five-Year Plan for the Development of the Electronic Information Manufacturing Industry", proposing that the revenue of enterprises above a designated size will exceed CNY 30 trillion by 2030. It also explicitly stipulates in key tasks to consolidate the foundation of the photonics industry development, set up a special column for key photonics technologies and product R&D, and promote the construction of optoelectronic convergence integration platforms. The "15th Five-Year Plan for the Development of the Information and Communications Industry" issued by the MIIT requires advancing the construction of computing power transmission channels, deploying 400G and above high-speed transmission technologies, building direct optical fiber links, promoting the sinking of 100G optical network equipment, and advancing the coverage of 10G optical networks.
Driven by both policies and the market, the optical fiber industry has a bright prospect, but hidden concerns also exist. Risks such as AI computing power and cloud vendors' capital expenditures falling short of expectations, changes in the supply-demand pattern due to new optical preform capacity, and significant fluctuations in centralized procurement and spot prices all require attention.
Notably, the high prosperity is spawning a new round of capacity expansion wave: Hengtong Optic-Electric plans to increase the optical preform capacity of its Inner Mongolia base by 1.5 times, and YOFC has raised HKD 2.229 billion to expand its global base. Looking back at the previous cycle, overcapacity occurred after the peak of 4G and FTTH, and the centralized procurement price of ordinary cables plummeted by over 80% in two years. Currently, multiple countries around the world are expanding capacity simultaneously, and the risk of overcapacity is not an unfounded fear.
Conclusion
History has repeatedly proven that a super cycle driven by supply-demand mismatch will eventually face an inflection point where supply catches up with demand. In the midst of this super cycle, the optical fiber industry must remain particularly clear-headed: it should not only avoid repeating the cycle of "price increase—capacity expansion—overcapacity—plummeting prices" but also accelerate the industrialization of cutting-edge technologies such as hollow-core fibers and multi-core fibers to promote the healthy development of the industry.
Managing Editor/Layout: Zhu Wenfeng
Proofreader: Mei Yaxin
Supervisor: Liu Qicheng