Surging Demand from AI Computing Centers Drives a Spike in G657A2 Fiber Prices.

The sustained expansion and upgrading of the optical communications industry’s market vitality can be attributed to a profound transformation in its core driving forces.

In the past, optical communications was akin to constructing "digital highways" (Fiber-to-the-Home) and "information interchanges" (5G base stations) for the world. Today, it has welcomed a far more significant client: AI computing power. This shift is no longer merely about building roads; it is about constructing a "neural network" for a "super-brain."

The explosive growth in the construction of global intelligent computing centers has become the primary engine driving the surge in demand for optical communications. Unlike traditional data centers—which focus primarily on CPU-based computation, storage, and external service traffic—AI intelligent computing centers must support the collaborative computing of high-density GPU clusters. Thousands of GPU cards are required to exchange massive volumes of data (such as model parameters and gradients) in real-time and at high frequencies during training tasks. This necessitates an internal network architecture (such as InfiniBand or RoCE Ethernet) that is extremely complex and dense; consequently, the fiber consumption per single cabinet is 5 to 10 times higher than that of a traditional server room.

If one likens an AI intelligent computing center to a "super-brain" in the act of thinking, then optical fibers represent the intricate, crisscrossing neural fibers within it—determining the scale and connectivity breadth of the computing cluster. Optical modules, meanwhile, act as highly efficient and precise "signal converters" at every neural synapse, responsible for high-speed, accurate conversions between electrical and optical signals; they determine the speed, efficiency, and energy consumption of computing power transmission. Together, these two components address distinct challenges—one resolving the issue of "connection scale" and the other addressing "communication efficiency"—thereby underpinning the foundational computing infrastructure for AI.

In 2025, total global demand for optical fiber is projected to grow by 4.1% year-on-year—a steady rate of expansion. However, within this total, the demand for optical fiber specifically within the data center sector is expected to skyrocket by 75.9%, demonstrating explosive growth momentum. The structural shift is even more pronounced: according to data from CRU, the share of optical fiber demand attributable to AI-related applications is set to surge from 5% in 2024 to 30% by 2027. By that time, the total annual demand for optical fiber within global data centers is projected to reach 880 million core-kilometers.

In the military sector, fiber-guided drones have emerged as a significant source of incremental demand for optical fiber, thereby unlocking entirely new avenues for growth. Fiber-optic guided drones (such as loitering munitions) require the continuous deployment of optical fiber during flight for guidance purposes. This "kite string"—which is non-recoverable and consumed in massive quantities by individual units—renders the fiber a quintessential "consumable." Currently, global annual demand in this sector has rapidly surged to approximately 50 million core-kilometers, with projections indicating it will reach 80 million core-kilometers by 2026.

Furthermore, the shifting geopolitical landscape has triggered a restructuring of supply chains. Russia, for instance, has seen its domestic optical fiber manufacturing capacity grind to a halt; consequently, the country now relies almost entirely—nearly 100%—on imports to meet the optical fiber requirements of its domestic optical communications infrastructure projects. As the world's largest producer of optical fiber and cable—boasting the most comprehensive industry chain—China has emerged as Russia's primary supplier, thereby directly amplifying short-term demand for Chinese-made optical fiber. Since 2026, the export price of optical fiber materials shipped from China to Russia has escalated by a factor of 2.5 to 4.

While the dual surge in demand is already robust, the inherent inflexibility and constraints on the supply side provide a long-term foundation for these rising prices.

The optical fiber industry chain adheres to a strict "preform—fiber—cable" production sequence; within this process, the optical preform serves as the critical linchpin that directly dictates the entire industry's supply ceiling. Optical preform manufacturing is characterized by high technological barriers and a lengthy capacity expansion cycle—typically spanning 18 to 24 months. Consequently, even if manufacturers were to initiate capacity expansion immediately, the resulting new capacity would not become available until sometime after 2027 at the earliest. Moreover, having recently weathered a period of intense "price wars" and subsequent capacity rationalization, manufacturers remain cautious and have largely refrained from undertaking large-scale capacity expansion initiatives. The intrinsic characteristics of optical preforms thus ensure that supply struggles to keep pace with the rapid growth in demand.

Given the limited availability of optical preforms, capacity for mainstream optical fibers is being squeezed, creating a self-reinforcing cycle: the more critical the demand, the greater the supply shortage, and the higher the price. Since January 2026, the supply of optical fiber preforms has consistently fallen short of demand; global production capacity is now operating near full utilization. Specifically, the preform production lines at China's four leading optical fiber enterprises are all running at maximum capacity, while overseas manufacturers are also maintaining high capacity utilization rates. According to institutional estimates, the global shortage of optical fiber is projected to reach 180 million core-kilometers in 2026—representing a shortfall rate of 16.4%—with the tight balance between supply and demand expected to persist until at least the end of 2027. This shortage is further exacerbated by a structural mismatch in production capacity; manufacturers are prioritizing the production of high value-added specialty fibers, yet the drawing efficiency for these products is 10% to 15% lower than that of mainstream G.652.D fibers, thereby consuming a disproportionately larger share of optical preform capacity.

As computing power undergoes massive expansion, the "shovel sellers"—the providers of underlying infrastructure and tools—are the first to reap the benefits, signaling the arrival of a new boom cycle for the "optical" industry chain.

Currently, major overseas technology firms continue to accelerate their investments in computing power. Capital expenditure forecasts for 2026 released by Amazon, Microsoft, Google, and Meta indicate that the combined spending of these four cloud computing giants alone will exceed $600 billion, with the majority of these funds earmarked for the construction of AI infrastructure.

Consequently, given the rigid constraints on supply, signals regarding price increases across various segments of the optical communications industry are expected to become increasingly distinct and sustained.

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