CITIC Securities: Continually Optimistic About Investment Opportunities in the Optical Fiber and Cable Industry

CITIC Securities research report says that since the third quarter of 2025, fiber-optic cable prices in the Chinese market have continued to rise, reflecting improving demand and overall tight supply. Overseas demand is strong, and exports have performed robustly, reflecting strong global demand in the fiber-optic cable market. CITIC Securities expects that the fiber-optic demand driven by AI will continue to grow at a high rate. First, the global optical module demand will still grow significantly in 2026, and corresponding fiber-optic demand will increase accordingly. Second, it is expected that fiber-optic demand for Scale up in 2027 may start to ramp up. Third, DCI will also bring a large amount of demand. At present, the fiber-optic cable industry has moved from a recovery phase to a stage of “tight supply and rising both volume and price.” As a heavy-asset industry, CITIC Securities expects that it will be difficult to add new production capacity in the short term, so prices are likely to keep rising, and it continues to recommend the fiber-optic cable sector.

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CITIC Securities: Continues to be bullish on investment opportunities in the fiber-optic cable industry

The fiber-optic industry enters a favorable cycle

Since 2025Q3, fiber-optic prices in the Chinese market have continued to rise, reflecting improving demand and overall tight supply. Overseas demand is strong, and export performance has been robust, reflecting strong global demand in the fiber-optic cable market. We expect that fiber-optic demand driven by AI will continue to grow rapidly, with the first being that global optical module demand will still increase significantly in 2026, which in turn will drive fiber-optic demand growth (mainly for Scale out). Second, it is expected that fiber-optic demand for Scale up around 2027 may begin to ramp up; Corning’s outlook indicates that the Scale up demand volume will be 2-3 times that of the current enterprise network business. Third, Scale Across will also bring a large amount of demand. At present, the fiber-optic cable industry has moved from recovery to a stage of “tight supply and rising both volume and price.” As a heavy-asset industry, we expect that it will be difficult to add new production capacity in the short term, so prices are likely to keep rising, and we continue to recommend the fiber-optic cable sector.

1、CRU data shows that since the third quarter of 2025, the domestic G652D fiber-optic price has continued to increase quarter over quarter. By January 2026, it has risen to 31.5 yuan per fiber-kilometer, up 79% compared with November 2025, reflecting stronger industry demand and overall tight supply. In 2025, China’s export volume of optical preforms increased year over year by 89.5%, and export value increased year over year by 81.7%. The export volume of fiber-optic cables increased year over year by 47.1%, and export value increased year over year by 65.4%. Strong export growth reflects strong global demand for fiber-optic cables and related equipment. On the one hand, overseas AI demand is strong; on the other hand, products such as battle-field drones also consume large quantities of G657 fiber-optic cable.

2、We expect that fiber-optic demand driven by AI and others will continue to grow at a relatively fast pace: first, considering that global optical module demand will still grow significantly in 2026, corresponding fiber-optic demand will also grow accordingly (mainly for Scale out). Second, it is expected that fiber-optic demand for Scale up around 2027 may start to ramp up; Corning expects that the Scale up demand volume will be 2-3 times that of the current enterprise network business. Third, Scale Across will also bring a large amount of demand.

3、Hollow-core fiber-optic cable has advantages such as low loss, low latency, low nonlinearity, and low dispersion. North American CSP vendors and domestic operators are actively deploying hollow-core fiber-optic cable.

4、The market is concerned about the supply-demand pattern of fiber-optic cables and worries that after prices rise, supply will grow rapidly. We believe: first, manufacturers experienced the boom brought by FTTH from 2016 to 2018 and also felt the supply-demand imbalance in 2019 and after; the pain caused by price cuts—this time, manufacturers’ capacity expansion will be relatively rational. In fact, after 2020, the industry has generally been clearing out excess capacity and there has been little expansion. Second, the capacity expansion cycle for optical preforms is at least one year (new entrants require even more time). Third, fiber-optic products such as G654E, G657, multi-mode, and hollow-core have high technical requirements and cannot be quickly tackled by new entrants.

5、We expect that in 2026, North American fiber-optic cable will face a supply shortfall, and we continue to be bullish on the fiber-optic cable sector. We also recommend focusing on domestic leading fiber-optic cable manufacturers’ breakthroughs in North America.

Risk warning: Fiber-optic demand growth may be slower than expected; fiber-optic price increases may be less than expected; risk that capacity expansion progresses too quickly; risk of changes in anti-dumping policy, etc.

（Source: People’s Financial News）