AI Computing Infrastructure Drives Fiber Optic Industry's Surge in Both Volume and Price

Introduction: Fiber Optic Sector Continues to Heat Up

Since 2025, the fiber optic sector has become one of the most closely watched segments in the capital markets. According to incomplete statistics from Choice, among 64 fiber optic concept companies, more than 30 have disclosed their first-quarter reports, with most enterprises showing double growth in both revenue and profit. The driving force behind this rally is not mere speculative hype, but real industrial demand triggered by AI computing infrastructure construction. A recent report by Shanghai Securities News pointed out that the fiber optic industry is experiencing a rare supply-demand mismatch, with orders for mainstream fiber optic products booked through early 2027 and the industry's prosperity cycle still accelerating upward.

Core Logic: AI Computing Infrastructure Creates a 'Rigid Gap'

The core logic of this fiber optic industry prosperity cycle can be summed up in two words — supply-demand mismatch.

On the demand side, the global AI large model race has entered a white-hot phase, with major tech giants ramping up investment in computing infrastructure. Whether it is the construction and expansion of hyperscale data centers or high-speed interconnection between intelligent computing clusters, massive demand has been generated for high-performance fiber optic cables. Unlike traditional communication networks, AI computing scenarios impose higher requirements on fiber optic transmission bandwidth, latency, and density, driving explosive growth in demand for high-end fiber optic products.

At the same time, deep 5G network coverage worldwide, the continued rollout of FTTH (Fiber to the Home), and the implementation of national-level computing network projects such as China's "Eastern Data, Western Computing" initiative have further added incremental fiber optic demand. Under the resonance of multiple factors, fiber optic demand growth has far exceeded previous market expectations.

However, on the supply side, the expansion cycle for fiber optic preforms takes 18 to 24 months, meaning that even if companies initiate expansion plans now, new capacity could only begin to be released gradually in the second half of 2026 at the earliest. Fiber optic preforms are the core upstream material for fiber optic production, with complex manufacturing processes, massive equipment investment, and high technical barriers, making rapid capacity scaling difficult in the short term. The enormous gap between supply rigidity and demand elasticity has formed a so-called "rigid gap," directly driving both volume and price increases for fiber optic products.

In-Depth Analysis: Multiple Segments of the Supply Chain Benefit Significantly

Based on the disclosed first-quarter report data, the upstream, midstream, and downstream segments of the fiber optic supply chain are all exhibiting varying degrees of prosperity transmission effects.

Upstream Materials: Fiber optic preform manufacturers are the first to benefit. As preforms represent the critical bottleneck in the entire supply chain, companies controlling core production capacity have significantly enhanced bargaining power, with product prices having undergone multiple rounds of increases since the fourth quarter of last year. Some leading companies' preform order visibility has extended to early 2027, with capacity utilization rates running near full load.

Midstream Manufacturing: Fiber optic cable manufacturers are also experiencing favorable conditions with rising volume and prices. On one hand, downstream customers are rushing to sign long-term contracts to secure supply, pushing order fulfillment rates to multi-year highs. On the other hand, cost pressures from rising raw material prices have been successfully passed through to downstream customers, with corporate gross margins showing signs of stabilization and recovery.

Downstream Applications: Demand for supporting products such as optical modules and optical connectors is growing simultaneously. AI data centers have seen surging demand for 800G and even 1.6T high-speed optical modules, driving prosperity across the entire optical communications supply chain. Notably, fiber usage density in AI scenarios is far higher than in traditional telecom scenarios — a single hyperscale data center can consume tens of times more fiber than a traditional facility, bringing structural incremental growth to the industry.

From a capital market performance perspective, the fiber optic sector has significantly outperformed the broader market year-to-date. Institutional investors' attention to the fiber optic sector is also rising rapidly, with multiple brokerage research divisions publishing in-depth reports and extending their forecasts for the industry's prosperity cycle to 2026 or even longer.

Furthermore, from a global competitive landscape perspective, Chinese fiber optic companies possess unique advantages in this cycle. After years of technological accumulation, leading domestic enterprises have achieved self-sufficiency in the fiber optic preform sector, not only meeting domestic market demand but also accelerating expansion into overseas markets. Amid the global AI infrastructure wave, the international competitiveness of China's fiber optic industry continues to strengthen.

Risk Warning: Caution Still Needed Amid the Boom

Despite the optimistic industry outlook, investors should remain aware of potential risks. First, if AI computing investment growth falls short of expectations or major tech companies experience periodic contractions in capital expenditure, fiber optic demand growth could slow. Second, when expanded capacity is released en masse in the second half of 2026, the supply-demand dynamic could reverse, potentially subjecting the industry to price correction pressures. Third, geopolitical factors and international trade frictions could also disrupt fiber optic product exports.

Future Outlook: Prosperity Cycle Expected to Extend Beyond 2026

Overall, the fiber optic industry stands at the forefront of the AI era. In the short term, the rigid supply-demand gap is difficult to bridge, and the trend of rising volume and prices is expected to persist throughout 2025. In the medium term, as global AI infrastructure construction enters an acceleration phase and nations deepen their digital economy strategies, fiber optic demand growth is supported by solid industrial fundamentals.

Multiple industry research institutions forecast that the global fiber optic market could double in size within the next three years, with AI-related demand serving as the most critical growth engine. For leading enterprises with technological barriers and capacity advantages, this prosperity cycle is not only a window for earnings realization but also a pivotal period for establishing long-term competitive positioning.

Fiber optics — this seemingly traditional "information superhighway" — is experiencing unprecedented vitality amid the AI wave.