Optical Fiber Surges 650%: Behind 1.6T Optical Module Volume Release Causing Supply-Demand Imbalance, Why Can It Have the Last Laugh?

Current Core Focus: Computing Power Collaboration + Chemical Industry! [Taoguba]
But I’ve written about these two many times before, and I don’t want to write about them today because I want to further explore thoughts on optical cables!
The main reason is that I previously mentioned that in the main trend: fiber optic cables! It is one of the core themes!
Reason: AI computing power drives a physical revolution, with fiber optics experiencing both price and volume increases + hollow-core commercial breakthroughs!

1. Macro Outlook: Breaking Physical Limits, Optical Interconnection Enters a Golden Decade

1. Core Narrative: Reshaping the arteries of computing power, the shift from copper to fiber is irreversible

As AI large models enter the trillion-parameter era, GPU clusters with thousands of cards become standard. The scale of computing power faces a physical ceiling in electronic transmission: high latency, high power consumption, and bandwidth bottlenecks become the main constraints on efficiency. The shift from copper to fiber has moved from consumer access networks to core AI data centers, transforming fiber from a “general communication pipeline” into a “dedicated AI computing carrier.” This industry is undergoing a historic shift from “general connectivity” to “computing infrastructure,” with the next 5-10 years being a golden period for optical interconnection.

2. Cycle Positioning: Rigid supply-demand gap, volume and price rising together, not a short-term cycle

The industry is entering a phase driven by “explosive demand for AI computing power,” “rigid supply constraints of optical fibers,” and “inventory cycle reversal,” leading to simultaneous volume and price increases. This price rise is a structural industry reversal, not seasonal fluctuation. Over the next 12-18 months, supply-demand gaps will be hard to close, and industry profit centers will systematically shift upward.

Price data (as of 2026.3.10, commercial spot/loose fiber prices, non-bulk limited prices):

G.652.D Standard Single-Mode Fiber: Before New Year’s 18-20 RMB/km → Current 65-85 RMB/km, up approximately 260% (original 650% was an extreme niche quote, not mainstream transaction price)
G.657.A1 Bending-Resistant Fiber: Before New Year’s 23-25 RMB/km → Current 95-115 RMB/km, up approximately 350% (original 487% was high)
G.657.A2 High-Performance Bending-Resistant Fiber: Before New Year’s 35-40 RMB/km → Current 160-190 RMB/km, up approximately 370% (original 557% was an extreme spot price)
Price increases have broken historical cycle ranges, driven mainly by rigid AI computing infrastructure demand and capacity bottlenecks, not short-term supply-demand mismatches.

3. Technological Singularity: OFC 2026 sets the tone for hollow-core fiber commercialization year

The OFC conference in Los Angeles (March 15-19, 2026), the top global optical communications event, marks a key milestone for hollow-core fiber (HCF) commercialization, transitioning from lab pilots to large-scale deployments by North American cloud giants, enabling a technological leap. Hollow-core fiber will break through the refractive index limits of traditional solid-core fiber, shifting industry valuation from traditional manufacturing (PE 15-20x) to high-tech growth stocks (PE 30-40x).

2. Demand Side: AI Computing Power Drives Explosive Growth in Optical Interconnection Needs

1. Core Contradiction: Moore’s Law Failing, Latency = Computing Power Loss

New generation AI clusters like Nvidia GB200, Rubin require microsecond-level communication synchronization between GPUs. Traditional solid-core fiber transmits at only about 2/3 the speed of vacuum (refractive index 1.45). Latency and nonlinear losses lead to wasted computing power; additionally, transmission rates are upgrading from 400G to 1.6T/3.2T, increasing heat dissipation and power consumption pressures, conflicting with green AIDC requirements.

2. Technological Breakthrough: Disruptive Value of Hollow-Core Fiber (HCF)

HCF confines light signals within an air core via microstructures, with near-vacuum light speed, achieving qualitative performance leaps:

• Latency reduced by 31%
• Transmission rate increased by 40%-45% (original 47% slightly exaggerated)
• Nonlinear effects nearly eliminated
• Significantly reduced relay amplification and DSP processing
• Power consumption decreased by over 20%
• Suitable for high-density AI clusters

Commercialization Progress: Microsoft, Amazon, Google have completed lab tests by Q3 2026, initiating small-scale commercial deployment, with full-scale rollout in 2027.

3. Demand Structure: Special fiber shortages, global supply-demand resonance

Multimode fiber: 2025 global demand ~8 million core-km; with 1.6T modules in 2026, demand doubles to over 16 million core-km.
G.657.A2 special fiber: For high-density AIDC wiring, 2025 global demand ~70 million core-km, with spot market shortages, “full payment queue for delivery” appears.
North America: Cloud providers accelerate capacity expansion, local fiber capacity insufficient, external procurement surges, domestic orders pushed to Q4 2026.
Domestic market: Operators upgrade procurement structures, special fiber share increases; Tianjin Telecom’s procurement failure indicates market pricing power returning to manufacturers, with procurement prices aligning with spot prices.

3. Supply Side: Four Rigid Constraints Lock in Price Increases

1. Fiber Optic Rod Capacity Bottleneck: Mismatched Expansion Cycles, Persistent Gaps

Fiber rods are the “chips” of the fiber industry chain. Expansion cycles are 18-24 months, with complex processes and strict approvals, leading to linear capacity growth. Meanwhile, AI demand is exponential; in 2025-2026, new capacity cannot meet demand growth. High-end capacity is prioritized for special fibers, passive compression of general fiber capacity worsens shortages across categories.

2. Inventory Cycle Reversal: Panic Restocking Begins, Pricing Power Shifts

Deep inventory reduction in 2023-2024; by Q3 2025, manufacturer and channel inventories are nearly cleared, industry shifts from “buyer’s market” to “seller’s market,” adopting spot pricing. Raw material costs are relatively stable; price increases almost fully translate into gross profit, amplifying operating leverage, with top manufacturers showing strong profit elasticity.

3. Upstream Raw Material Constraints: Whole Industry Chain “Barrel Effect”

Special tubing: Shortages in multi-mode and hollow-core quartz tubes, long delivery cycles over 12 months, constraining capacity release.
Rare metals: Germanium used in fiber doping faces export controls, tightening supply and raising high-end fiber costs.
Aramid fiber: Essential for fiber reinforcement cores, monopolized by overseas giants, supply gaps transmit domestically.

4. Key Catalysts: OFC 2026 Conference, Commercialization Validation

1. Conference Significance
   Gathering over 90 countries and 16,000 industry professionals, it is the core platform for setting industry standards, signing orders, and commercializing technology, catalyzing AI fiber market sentiment and fundamentals.

2. Key Highlights
   Hollow-core fiber: Long Fiber launches HollowBand® upgrade, attenuation reduced to 0.04dB/km, draw length over 90 km, potential pilot supply agreements with Microsoft and Amazon.
   1.6T Modules: 2026 marks commercialization year, global shipments grow over 800%, with companies like ZTE and Innolux demonstrating yield rates over 80%.
   CPO Technology: Nvidia Rubin platform equipped with CPO, improving optical engine efficiency by over 40%, driving full industry chain resonance from fiber to modules to CPO.

5. Price Transmission: Aramid Fiber Hidden Champion, Elasticity Awaiting Release

1. Core Logic: Fiber Volume Expansion → Rigid Aramid Demand Growth

Aramid (PPTA) is the only indispensable material for fiber reinforcement cores, providing tensile protection. Under high-density wiring in AI data centers, aramid usage per fiber increases by 10-15%, outpacing fiber capacity growth.

2. Supply-Demand Pattern: Overseas Surge, Domestic Substitution Window

Overseas giants (DuPont, Teijin) hold 70% of global capacity; by 2026, full capacity and sales, prices nearly double, spot shortages occur. Domestic aramid prices only rise 10-20%, with lagging and large room for increase. Downstream demand pushes prices upward.

High industry barriers: over 5 billion yuan investment for 10,000-ton capacity, strict process and certification barriers, leading firms enjoy significant margins.

6. Leading Companies (Adjusted Performance + Logic, Avoiding Exaggeration)

1. Leading fiber optic cable companies (volume and price benefits + technological catalysts)

2. Upstream material leaders:

China’s top aramid fiber producer, third globally, first domestically, deeply integrated with Longfei, Zhongtian, Hengtong, leading supply share!
Overseas aramid price hikes + domestic substitution, product prices in early rising stage, with high gross margin potential!
Appeared at OFC 2026, likely to gain overseas client certifications, opening international markets, current valuation underestimating industry benefits!
Why focus on upstream materials? The most explosive growth in lithium batteries isn’t downstream (CATL, BYD), but upstream (spodumene, salt lake lithium extraction)! This is the core focus!
Like + share + comment: Behind the 650% surge in fiber optics: 1.6T modules’ volume causes supply-demand gap—why will it end up smiling last?

This is just my personal trading review and reflection. Investment involves risks; trade cautiously! Plans never keep up with market changes; everything should be based on market conditions. The content reflects personal thoughts and records, serving as a record of my understanding of the market. It is for personal sharing only, not investment advice. Trade at your own risk!
(Research and compilation are difficult; your likes, shares, and comments are our motivation. Thank you!)

Market overview: Today’s overall market shows complex oscillation, with a high open, then a pullback, followed by a rebound. The reasons are twofold: first, the volatility of Middle East situations; second, quant-driven lack of a clear main line. Overall sentiment is complicated, with increasing difficulty. Early trading saw 3,000 stocks up, but in the afternoon only 1,458, with 3,633 down. The core focus remains on complex oscillation through next week, with a bullish outlook on 4198.

When will resistance break? The overall bullish view until the 16th remains unchanged! Trading volume still at 2.44 trillion.
Sentiment: Still at a low point, 52 limit-ups, 2 limit-downs, 71% limit-up rate, 8 stocks with 4 consecutive limit-ups.
Sector focus: Currently no dominant main line; the strongest sectors are energy storage + power + chemicals! Power and chemicals are the most explosive, but sustainability needs further observation. Possible trend-based movement: wind power + optical communications + coal + robotics.
Power: Leading stock Zhongnan Culture with 4 limit-ups; next, Green Power 3 limit-ups, Huadian 3 limit-ups; core leader Jin Kai with 10 days and 5 limit-ups. Sustainability uncertain.
Chemicals: Leading stock Jinjian with 9 days and 5 limit-ups; others like Sanfangxiang need further observation.
Energy Storage: Leading stock Chint Power with 2 limit-ups; smaller trend stocks include Nabahe and Shouhang.
Success requires discipline and persistence! Wishing everyone on the path of effort more luck!

Today’s Highlights:

1. Minister of Natural Resources, Guan Zhio: Ocean GDP surpassed 11 trillion yuan last year
2. Minister of Justice, He Rong: This year will focus on legislation to address “involution” competition; accelerate AI-related legislation research
3. Leap Star joins the “Little Lobster” battle, offering 50,000 free deployment slots
4. Wind power & energy storage: UK abolishes 33 wind turbine component import tariffs from April 1, reducing core parts tariffs (blades, cables) from 6%, 2% to 0%, aiming to unlock £22 billion investment and accelerate North Sea offshore wind projects.
5. Computing power: Demand surges, leading model providers face capacity shortages; Tencent tokens’ price up by 400%.

Follow Commodity Themes

1. Live pigs: 10.35 yuan (-0.19%), pig costs 12, Muyuan 11.6, feed over 50%, labor 10-15%.
2. Battery lithium carbonate: 158,000 yuan (0%), salt lake cost 30,000-40,000, mica 60,000-90,000, spodumene 60,000-80,000.
3. Praseodymium-Neodymium Oxide: 785,000 yuan, NdFeB N35: 1,795,000 yuan (0%), light cost 350,000-400,000, MP 790,000, Australian 450,000-500,000. Mining: 8,000–10,000 yuan/ton, heavy rare earths 1.3-1.5 million yuan/ton.
   Like + share + comment: Aim for monthly income of 1 million! Thanks for your support!