Optical fiber supply and demand may shift to shortage in 2026, with data centers and UAVs driving prices higher
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Optical fiber supply and demand may shift to shortage in 2026, with data centers and UAVs driving prices higher
Nomura's expert call believes that global optical fiber demand will exceed 800mn fkm in 2026, while global capacity is about 700mn fkm, implying a gap of at least 100mn fkm, with data centers, UAVs, and overseas IDC projects as the core sources of incremental demand.
- Global optical fiber demand in 2026E is expected to exceed 800mn fkm, while capacity is about 700mn fkm, implying a gap of at least 100mn fkm.
- Data center demand is expected to be about 250mn fkm, accounting for about 30% of total demand; among this, US demand may rise from 55mn fkm in 2025 to 150mn fkm in 2026E.
- UAV demand is expected to rise from 60-70mn fkm in 2025 to 120mn fkm in 2026E, mainly using G.657A2 fiber.
- China's G.652D spot price is about CNY100-120/fkm, up sharply from about CNY20/fkm at the beginning of 2025; G.657A2 spot price is about CNY230/fkm.
- The main bottleneck to capacity expansion is in the fiber preform segment; US companies typically need 12-24 months to expand capacity, while Chinese companies need about 6-12 months.
Report interpretation
Overview
This report is a summary of Nomura's 67th AI expert call in the Global AI Trend Tracker series, focusing on optical fiber market updates. The expert discussed optical fiber demand, demand structure, price changes, export conditions, and capacity among major suppliers. The core conclusion is that global optical fiber demand in 2026 may significantly exceed capacity, with the supply-demand gap, data center construction, UAV applications, and preform capacity bottlenecks jointly driving fiber prices higher.
Core views
The expert expects total global optical fiber demand in 2026E to exceed 800mn fkm, while global capacity is about 700mn fkm, implying a capacity shortfall of at least 100mn fkm. Incremental demand mainly comes from data centers and UAVs: data centers account for about 250mn fkm, or around 30% of total demand; UAV demand may rise from 60-70mn fkm in 2025 to 120mn fkm in 2026E. Demand in the telecom market is relatively stable, with the four major Chinese telecom operators expected to demand about 200mn fkm in 2026, below the peak level of about 300mn fkm per year during the 2016-18 5G+FTTX boom.
Analysis framework
The report uses expert interviews to cross-validate the optical fiber industry's fundamentals across dimensions including total demand, regional structure, application scenarios, fiber types, spot prices, long-term contract prices, export routes, and capacity plans of major suppliers.
Methodology notes
Industry expert call
It uses input from experts at leading optical fiber companies to obtain information on supply and demand, pricing, exports, and capacity. This is suitable for quickly tracking marginal changes in the industry chain, but the data still relies on expert estimates.
Capacity gap
By comparing demand of more than 800mn fkm in 2026E with global capacity of about 700mn fkm, it infers a gap of at least 100mn fkm and uses this to judge price support.
Spot prices and long-term contract prices
By comparing current prices versus 2025 prices for G.652D, G.657A1, and G.657A2 in China, the US, and Europe, it observes how supply-demand tightness is transmitted to pricing.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- YOFC (6869 HK)Major optical fiber supplier, marked as Buy in the report
- Strengths
- The expert says total output in 2025 was below 100mn fkm, and 2026E capacity could reach 150mn fkm, corresponding to about 5,000 tons of preform.
- Weaknesses
- Capacity expansion is still affected by preform supply, execution pace, and demand realization.
- Comparison
- Its 2026E capacity scale may be close to Corning's 150mn fkm level.
- Risks
- Price declines, capacity expansion falling short of expectations, or data center/UAV demand below expert estimates.
- Corning (GLW US)Major global optical fiber supplier, marked as Not rated in the report
- Strengths
- Global optical fiber capacity is about 150mn fkm, corresponding to about 5,600 tons of preform.
- Weaknesses
- The expert expects 2026E capacity will not increase much.
- Comparison
- Current capacity scale is leading, but short-term expansion flexibility may be lower than that of some Chinese suppliers.
- Risks
- The US preform capacity expansion cycle is relatively long, typically requiring 12-24 months.
- Hengtong (600487 CH)Chinese optical fiber supplier, marked as Not rated in the report
- Strengths
- 2025 capacity is about 90mn fkm, with plans to exceed 120mn fkm in 2026E and surpass 4,000 tons of preform.
- Weaknesses
- The report does not provide a rating, target price, or earnings forecast.
- Comparison
- The magnitude of capacity expansion is smaller than YOFC in absolute scale, but it still has meaningful incremental growth.
- Risks
- Risks related to expansion execution, price sustainability, and changes in export routes.
- China ZTT (600522 CH)Chinese optical fiber supplier, marked as Not rated in the report
- Strengths
- 2025 capacity is about 70mn fkm, expected to reach 90mn fkm in 2026E, with preform increasing from 2,500 tons to 3,500 tons.
- Weaknesses
- Its expansion scale is smaller relative to YOFC and Hengtong.
- Comparison
- It is in the leading supplier group, but its 2026E optical fiber capacity is below YOFC and Hengtong.
- Risks
- Changes in demand structure, preform bottlenecks, and price volatility.
- FiberHome (600498 CH)Chinese optical fiber supplier, marked as Not rated in the report
- Strengths
- Current optical fiber capacity is 65mn fkm, expected to reach 85mn fkm in 2026E, corresponding to about 3,200 tons of preform.
- Weaknesses
- Its capacity scale is relatively small among the suppliers mentioned in the report.
- Comparison
- Its 2026E capacity is below YOFC, Hengtong, and China ZTT.
- Risks
- Risks related to expansion pace, demand realization, and declines in optical fiber prices.
Key data
- 2026E global optical fiber demand>800mn fkmExpert estimate; fkm refers to fiber kilometer.
- Global optical fiber capacity700mn fkmCompared with demand, this implies a capacity gap of at least 100mn fkm.
- 2026E data center demand~250mn fkm, about 30% of total demandOne of the main sources of incremental demand.
- 2026E US data center-related demand150mn fkmAbout 55mn fkm in 2025.
- 2026E China data center-related demand40-50mn fkm, about +30% y-yExpert estimate.
- 2026E data center demand in other regions~50mn fkmSoutheast Asia and Latin America are driven by overseas IDC projects of US cloud vendors, about +50% y-y.
- UAV optical fiber demand60-70mn fkm in 2025, potentially reaching 120mn fkm in 2026EMainly uses G.657A2 fiber.
- 2026 demand from China's four major telecom operators~200mn fkmBelow the peak level of about 300mn fkm/year during the 2016-18 5G+FTTX boom.
- China G.652D spot price~CNY100-120/fkmAbout CNY20/fkm at the beginning of 2025.
- China G.657A1 spot price~CNY155/fkmAbout CNY20-22/fkm at the beginning of 2025.
- China G.657A2 spot priceCNY230/fkmAbout CNY28-30/fkm in 2025.
- US G.657A1 spot priceUSD13-15/fkmUSD6-7/fkm last year.
- US G.657A2 spot priceUSD16-20/fkmUSD8/fkm in 2025.
- Preform capacity expansion cycleUS 12-24 months; China 6-12 monthsThe expert believes the current expansion bottleneck is mainly in the preform segment.
Impact & implications
If the expert's view materializes, the optical fiber industry chain may enter a phase of tightening supply-demand conditions and price re-rating. Beneficiaries include suppliers with preform and optical fiber capacity that can expand production and participate in data center/UAV demand; however, as some companies are Not rated and the report is mainly based on expert commentary, the investment implications should be further confirmed with covered ratings, order verification, capacity ramp-up, and price sustainability.
Risks
- Expert estimates may deviate from actual orders, capacity, and prices.
- The pace of data center, UAV, or overseas IDC construction may fall short of expectations.
- Faster-than-expected preform capacity expansion could ease the supply-demand gap and pressure prices.
- China's optical fiber exports may be affected by US tariffs, entrepot processing, and changes in trade policy.
- Rapid spot price increases may cause customers to delay purchases or seek alternatives.
What to watch
- Whether global optical fiber demand in 2026E continues to exceed 800mn fkm.
- Whether US data center demand rises from 55mn fkm in 2025 to 150mn fkm.
- Whether UAV demand reaches 120mn fkm and continues to drive G.657A2.
- Whether spot and long-term contract prices for G.652D, G.657A1, and G.657A2 continue to rise or remain stable at high levels.
- Progress in preform and optical fiber capacity expansion at YOFC, Hengtong, China ZTT, FiberHome, and Corning.
- Whether policy affects the export route of Chinese optical fiber products to the US after processing in Southeast Asia and Latin America.