Why Have Fiber Optic Prices Skyrocketed, and How Long Will It Last?

Explosive price surge

Fiber-optic prices in China have surged to levels unseen in recent years. Industry surveys show G.652D fiber is trading above ¥50 per core-kilometer, with some suppliers quoting as high as ¥60 — up from under ¥20 in November 2025 and ¥35.6 in January 2026. G.654E, the high-end low-loss fiber favoured by AI computing centers, has climbed from roughly ¥130–140 to ¥170–180 and in some quotes to ¥240–260 per core-kilometer. Why the sudden spike? The short answer: demand has outstripped a tightly constrained, slow-to-expand supply chain.

Multiple demand shocks — AI, infrastructure and drones

The most important driver is AI. Large-scale AI "intelligent computing" (智算) centers and the dense DCI (data center interconnect) links between them consume many times the fiber of traditional data centers or carrier access networks — a single GPU-heavy cluster can require tens of thousands of core-kilometers just for server interconnects. Industry analysts and brokers now estimate AI-related scenarios could lift the share of such demand from under 5% in 2024 to as much as 35% by 2027. Meanwhile, large public projects are crowding the same market: it has been reported that Meta has pledged about $6 billion to buy fiber from Corning (康宁) by 2030, and the U.S. BEAD broadband program — reportedly backed by roughly $60 billion in federal funding and targeting full-fiber coverage for underserved areas — is adding fresh volume. Add military demand for G.657A2 fiber used in FPV drones, and you have overlapping surges across market segments.

Supply bottlenecks and geopolitics

Supply cannot flex quickly. The key upstream input, optical preforms (光棒), accounts for roughly 70% of fiber costs and requires 18–24 months to expand. Domestic leaders — Yangtze Optical Fibre and Cable (长飞光纤), Hengtong Optic‑Electric (亨通光电), Zhongtian Technology (中天科技) and FiberHome (烽火通信) — are reportedly running near 100% utilization and can only raise output 10–15% through process optimizations. North American and Japanese makers (Corning, Prysmian/普睿司曼, Fujikura/藤仓, Furukawa/古河) are also near capacity, and delayed new lines mean global tightness. Geopolitics matters: Western infrastructure spending and strategic supply choices have concentrated demand in North America and Europe, transmitting shortages worldwide and complicating export and procurement strategies for Chinese buyers.

Market impact and outlook

The ripple effects are already visible: panic buying, stockpiling, top‑price tender bids and even bid failures. Some small suppliers who previously won contracts on low-price bids may default or face unbearable margins. Given long preform lead times and elevated demand trajectories, most analysts say a meaningful price correction is unlikely in the short term — expect tightness to persist into 2026 and possibly through 2027 as new preform capacity and global supply rebalancing slowly come online. For network planners and procurement teams the question is stark: hedge now and pay up, or risk shortages later? The marketplace appears to be choosing the former.