Warning! Global fiber optic shortage, with a gap of 30%! China's four giants dominate 60% of the market!

This February 8th, I published an article revealing the next big trend: Optical Module CPO! [Taoguba]
And this is the new main trend: Fiber Optic Cables!
The core reason is: the global fiber optic gap is 30%-40%! Prices are changing daily!

Moreover, the leading US fiber optic cable company, Corning, has increased fivefold in 10 months! Market value has reached 1 trillion yuan!

Many people see the high valuation and write research reports, saying it’s just another pump! But if you follow the trend and don’t study the companies, are you just researching ST delistings? The more you study, the easier it is to find the core main line and leading companies!
And we started researching in December, but the trend only appeared at the end of January! Without research, how could we catch it? There are over 500 sectors and 5,000 companies—finding the explosive main line in just three months isn’t that easy!

1. Will fiber optic cables be the next optical communication CPO in 2026?

Recently, the fiber optic industry is experiencing an epic supply-demand reversal—prices changing daily, capacity at full production, demand exploding across the board, and unprecedented gaps. The four major factors resonate, signaling the start of a super cycle comparable to CPO.

1. Key phenomena overview

• Price surge: 657 A2 special optical fiber exceeds 100 yuan per core-kilometer; 652D standard fiber surpasses 60 yuan/km, up over 50% from the 2024 low (40 yuan), with daily price changes reaching record highs.
• Capacity at full tilt: The four major domestic players (Longhua, Hengtong, Zhongtian, FiberHome) are operating at 100% capacity for rod fibers; in extreme cases, capacity can be expanded by 10-15% through squeezing processes.
• Demand explosion: AI data centers, drone private networks, and the US Bead project combine to drive demand, with emerging markets’ share surging.
• Supply-demand gap: By 2026, the global capacity gap is expected to reach 180 million core-kilometers (a 16.4% shortfall), far exceeding the 4.8% gap during 2017-2018.

2. Why is this considered the “next CPO market”?
   Fiber optic cables and CPO share high demand-driven, supply constraints, price elasticity, and market rhythm characteristics, but fiber optics have stronger demand resilience and tighter supply constraints:

• Demand side: CPO relies only on AI data centers’ internal connectivity, while fiber covers the entire chain—AI computing clusters, carrier backbone, overseas infrastructure, special scenarios—making demand more extensive and resilient.
• Supply side: Fiber rod expansion cycles are 2-3 years (CPO is 12-18 months), with stricter raw material constraints, making supply rigidity much higher than CPO.
• Price elasticity: Industry gross margins are currently only 18-22%, with over 50% room for recovery from historical highs (30%+), far exceeding CPO’s current gross margin of 40% with less than 20% room for improvement.
• Market rhythm: We are at a critical transition from “differentiation validation to explosive acceleration,” with a performance inflection point expected in Q1 2026.
• Industry analogy: If CPO is the “neurons” of AI computing power, then fiber optics are the “vascular network”—without blood vessels, even the strongest neurons can’t survive!

3. Industry cycle: a turning point established, entering an upward channel

• Downtrend (2018-2023): Overcapacity, fierce price wars (fiber prices from 80 yuan to below 20 yuan), small and medium capacities cleared.
• Uptrend (starting 2026): Concentration among top players (CR4 over 60%), rational capacity deployment. Overseas giants operate at full capacity, tightening global supply.
• Latest signal: China Telecom’s centralized procurement price caps significantly increased (fiber cap estimated at ~70 yuan per core-kilometer), doubling from the bottom, confirming a price rise trend.

2. How big is the gap? Unprecedented global supply-demand imbalance! The gap will continue to widen until 2027

1. Global supply-demand gap overview (unit: billion core-kilometers/year)

Detailed estimates:

2. Why will the gap keep expanding?

• Demand side: irreversible triple explosion

  • AI data center demand: a single 10,000-card AI cluster needs 100,000 km of fiber; by 2026, over 50 new AI clusters globally, requiring over 5 million km (doubling 2025).
  • Validation: Corning, TDK, Preformed’s capacity for rod cables was full by Q2 2025, with purchases from China, indicating AI demand has spilled over globally.
  • Drone private network demand exceeds expectations: Cru data shows 2025 demand at 50 million km, rising to over 80 million km in 2026 (+60%), possibly higher (top companies like DJI and EHang are not fully counted).
  • US Bead project acceleration: $60 billion federal funding mandates 100% fiber coverage, with demand reaching 40 million km in 2026 (5% of global).

• Supply side: capacity expansion is increasingly difficult

  • Rod capacity bottleneck: core in “preform rods,” accounting for 60% of cost, requiring 2-3 years and over 2 billion yuan investment per 10,000-ton capacity.
  • Current maximum capacity:
    • Domestic four giants: 48,000 tons/year → 500 million km fiber/year
    • Industry maximum: with squeezing, can expand by 10-15% → 550-575 million km
  • New capacity dilemma:
    • No new rod capacity planned since Q3 2025 (long ROI).
    • International giants like Corning and Fujikura reached full capacity in Q2 2025, shifting procurement to China.
  • Key conclusion: a shortage over 10% usually causes a 50%+ price increase; the current gap of 16.4% explains why 657 A2 prices broke 100 yuan/km (up 150% from 2024’s low of 40 yuan). The gap will persist until late 2027, as the fastest capacity release for fiber rods is expected by then.

3. Deep analysis of driving factors: why can this price increase last?

1. Demand side: three engines, with AI as the core variable

• AI computing power (fastest growth): logic mirrors CPO’s demand-driven logic. A 10,000-card cluster needs 100,000 km of fiber; 50+ new clusters globally in 2026.
• Products: multimode fiber (OM5), ultra-low loss fiber (G.654.E), hollow-core fiber.
• Data: 2025 data center fiber demand +75.9%, maintaining over 60% growth in 2026.
• Overseas infrastructure (highest premiums): US BEAD project ($60 billion), European digital upgrades. Leading companies (Corning, Fujikura) are at full capacity, forced to buy from China.
• Premiums: export prices 10-15% higher than domestic, with domestic emerging markets (drones, AI) reaching export premiums—Longli, Hengtong, Zhongtian’s export share is 30%, 28%, 25%, but emerging markets are even higher (65%, 62%, 60%), with overall gross margins surpassing export businesses.
• Domestic recovery (fundamentals): demand from operators rising in volume and price; Unicom’s low-price orders face re-tendering; State Grid’s “14th Five-Year” investment +40% (OPGW demand).
• New scenarios: low-altitude economy (drone private networks) demands lightweight, interference-resistant fiber, with very low price sensitivity.

2. Supply side: fiber rod bottleneck, no short-term solution

• Core constraint: fiber preform rods (60% of cost) require 2-3 years to expand, with 2 billion yuan+ investment per 10,000-ton capacity.
• Capacity ceiling: 2026 global demand 1.28 billion km vs. capacity 1.10 billion km, a shortfall of 180 million km.
• Compared to 2017: the current gap ratio (16.4%) far exceeds the previous cycle’s 4.8%, making price increases more sustainable, expected to stay high until 2027.

4. Global market and China’s position: China accounts for 64% of capacity, with a 10-15% export premium

1. Global and Chinese market overview

2. Price comparison (Q4 2025)

• Export prices are 10-15% higher than domestic, but domestic emerging markets (drones, AI) are close to export prices, no longer relying on exports for high premiums—Longli, Hengtong, Zhongtian export shares are 30%, 28%, 25%, but emerging markets are higher (65%, 62%, 60%), with overall gross margins surpassing export businesses.

3. Top 10 global fiber optic cable companies’ market share

Key trend: Chinese manufacturers’ global market share rises from 50% in 2024 to 58.5% in 2026, as US companies’ dependence on Bead project imports increases, making China the biggest beneficiary in global fiber optic industry.

5. AI boom, fiber optic explosion—why China benefits the most! The entire industry chain’s advantages highlight why China is the biggest winner:

1. Largest capacity share globally (64%)
   China’s fiber capacity is 64% of the world’s, far exceeding the US (10%), Japan (8%), Europe (12%).
   Top four Chinese companies (Longli, Hengtong, Zhongtian, FiberHome) hold 38% of global capacity, forming the core of global capacity.

2. Full industry chain advantages (compared to CPO)

3. Technological breakthroughs: hollow-core fiber achieves a leapfrog

• Longli has commercialized hollow-core fiber, winning Guangdong Unicom’s centralized procurement (unit price ≤33,000 yuan/km).
• Hengtong is expanding advanced fiber materials, releasing high-performance hollow-core anti-resonance fiber.
• Zhongtian supports overseas operators with hollow-core fiber pilot projects, participating in the world’s first quantum teleportation verification.
• Hollow-core fiber will become the “second curve” of demand growth, similar to CPO’s technological upgrade from 800G to 1.6T.

6. Comparing with optical modules (CPO), seeking core leaders:

1. Comparison with CPO market

• Optical modules: rapid tech iteration (every 1-2 years), market shows “pulse-like” (three waves of rise and divergence), key is who first ships 1.6T/3.2T.
• Fiber optic cables: heavy assets, slow expansion, market shows “long cycle” (supply-demand gap supports 2-3 years of high prosperity), key is who has fiber rod capacity + high-end product share.
• Strategy: fiber sector’s sustainability may outperform optical modules in the latter half, suitable for “not chasing high at peak, rebalancing on pullback, holding until end of 2026.”
• Core stock selection logic: fiber rod self-sufficiency (cost), overseas/emerging share (gross margin), hollow-core tech (valuation).

Summary: The next “super cycle” for fiber optic cables is here!
The fiber optic industry is not just a simple “price increase cycle,” but a fundamental restructuring of demand. It’s no longer just cyclical manufacturing but a tech-driven infrastructure with growth attributes.

1. Operator share declines (<40%), AI/drones/export become dominant, with pricing power shifting.
2. Fiber rod capacity bottleneck means price rises are not short-term spikes but a 2-3 year sustained dividend.
3. China’s industry chain, with cost and tech advantages, becomes the biggest global winner in computing infrastructure.

After reading, do you understand whether this industry’s explosion is driven by trend industries? Is this sustainable? What should we do? Who are the leaders? Why them? (Industry reflection, not market advice! Not a recommendation!)
Like + share + comment: Warning! Global fiber optic shortage, gap reaches 30%! China’s 4 giants monopolize 60% of the market! (Also, the assistant needs to be fully reloaded, or I can’t answer your questions or provide service! Thanks!)

The above is just my personal trading review and reflection. Investment involves risks; trade cautiously! Plans are always outpaced by market changes. All content reflects personal thoughts and records, for personal understanding only, not investment advice. Use at your own risk!
(Research and compilation are not easy; your likes, shares, and comments are our motivation. Thank you!)

Overall market: Today’s market experienced another complex oscillation. Although trading volume exceeded 2.53 trillion yuan, up 700 billion from yesterday, the overall difficulty remains high as the number of advancing stocks declines. Today, 2,394 stocks rose, 2,670 fell. If there’s no breakthrough tomorrow, the divergence may deepen, as highs could break, and sentiment may decline. The key is whether the market will be suppressed or stabilize and move upward. Overall, the market remains bullish until March 2nd, after which there may be a sharp drop, along with important meetings ahead.

Sentiment: Overall stable but beginning to decline. 61 stocks hit daily limit, 3 hit limit down, with a 73% limit-up rate, 6 stocks with 6 consecutive limits, and 8 stocks with continuous boards.
Sector focus: Currently no clear main line; the strongest sectors are fiber optics, gas turbines, and computing infrastructure! Mostly tech-centered, with some rotation into non-ferrous metals and others.
Leading stocks: Yunnan Energy (6 days 6 limits), Huasheng (4 days 2 limits), others follow.
Gas turbines: Tianrun (3 days 2 limits), Longyuan, Wanze, with key leaders like Dongfang Electric and Yingshan.
Fiber optics: Farl (4 limits), Tongding (3 days 2 limits), but more volatile and complex.
Success requires discipline and persistence! Wishing everyone on the path of effort more luck!

Today’s highlights:

1. Zimbabwe terminates US health cooperation talks.
2. Computing hardware: AI demand surge, supply imbalance in fiber, glass, drill bits, etc., prices keep rising.
3. Generators: US President Trump to hold high-tech executives at the White House next week to pledge support for high-energy-consuming data centers’ power costs.
4. Environmental protection: The 2026 National Two Sessions approaching, draft laws including ecological environment regulations to be reviewed.

Follow commodity themes

1. Live pigs: 10.89 yuan (-1.27%), pig cost 12, Muyuan 11.6 yuan, feed costs over 50%, labor 10-15%.
2. Battery lithium carbonate: 175,000 yuan (+6.9%), salt lake raw material 30,000-40,000, mica 60,000-90,000, lithium hydroxide 60,000-80,000.
3. Praseodymium-neodymium oxide: 885,000 yuan (0%), NdFeB N35: 1,815,000 (0%), light cost 350,000-400,000, MP79, Australia 450,000-500,000.
   Like first, then watch—monthly income of millions! Thanks for your support!