AI Computing Power Ignites Market Demand; G652D G657A2 Fiber Optic Prices Soar to New Highs Point

Since the beginning of 2026, the optical fiber market has witnessed a rare surge in prices. The price of mainstream G.652.D single-mode optical fiber has rapidly climbed from approximately 3usd  per core-kilometer at the end of 2025 to about 7.5usd per core-kilometer. Spot quotes in certain distribution channels have breached the 7.5usd mark—some even surpassing the 12usd per core-kilometer threshold—setting a new seven-year high for cumulative price appreciation. Concurrently, high-end specialty fibers such as G.657.A2 and G.654.E have experienced even more significant price increases.

Several industry insiders interviewed on the matter indicated that this round of price hikes is driven by a concentrated surge in demand stemming from multiple sources: AI computing infrastructure, the “Eastern Data, Western Computing” initiative, and deep 5G network coverage. This demand surge is compounded by rigid constraints on optical fiber preform production capacity and tight supplies of upstream raw materials, creating a resonant imbalance between supply and demand. Driven by these factors, the share prices of A-share listed companies within the optical fiber, cable, and optical communications industry chains have continued to strengthen. Leading enterprises are reporting full order books and upward revisions to their earnings forecasts, signaling that the industry is reaching a critical inflection point—transitioning from a phase of price wars to one of profit recovery.

**Optical Fiber Price Hikes Fully Take Effect**

As the “nervous system” of digital infrastructure, optical fiber serves as the core medium for transmitting AI computing power, facilitating 5G communications, interconnecting data centers, and supporting the “Eastern Data, Western Computing” project. Its performance and supply directly determine the speed and quality of digital economy development.

The current wave of optical fiber price increases began in the fourth quarter of 2025 and entered an accelerated upward trajectory during January and February of 2026. This is not merely a localized price hike affecting specific specifications, but rather a comprehensive price surge spanning all product categories and distribution channels.

Specifically, data from CRU indicates that the average market price for G.652.D single-mode fiber—the most widely used type in the telecommunications sector—soared from less than 20 yuan per core-kilometer in November 2025 to between 40 and 50 yuan per core-kilometer by February 2026. The maximum monthly increase exceeded 75%, effectively doubling prices within a mere three months.

From the procurement perspective, the simultaneous rise in prices within carrier-led centralized procurement tenders further validates the authenticity and sustainability of this current round of price increases.

The widening gap between supply and demand remains the core factor underpinning this upward trend in prices. Guotai Haitong Securities states that, against the backdrop of a major cyclical upturn in the fiber optics sector, the industry-wide trend of price increases has been confirmed. After facing downward pressure in the first half of last year, prices for loose optical fiber rebounded in the second half; this recovery was driven by a significant surge in overseas demand for G.657.A2 fiber, which triggered a shift in production capacity. As capacity shifted away from G.652.D fiber—resulting in reduced supply and gradually lengthening lead times—prices for loose fiber have continued their upward trajectory in recent times.

**A Trend Set to Continue for Some Time**

The current sustained rise in fiber optic prices is not merely a transient market fluctuation driven by short-term speculation; rather, it is the result of the interplay of multiple factors, including a mismatch between supply and demand, rigid cost structures, and an optimization of the industry landscape.

Among these factors, the explosive growth on the demand side—coupled with rigid constraints on the supply side—constitutes the core underlying cause. From the perspective of demand, the rapid construction of AI computing infrastructure has emerged as the primary driver fueling the demand for optical fiber.

With the large-scale deployment of generative AI and large language models, the pace of construction for hyperscale AI data centers continues to accelerate. A single hyperscale AI data center consumes three to five times the amount of optical fiber compared to a traditional data center; consequently, the demand for low-loss, high-speed fiber—essential for internal interconnects and long-distance cluster-to-cluster transmission—is experiencing exponential growth.

Previous fiber optic cycles were typically driven by broadband expansion or 5G base station deployments by telecom operators—efforts fundamentally aimed at addressing the basic issue of “whether connectivity exists.” The current cycle, however, is driven by the need to support the high-frequency computing demands of large AI models—specifically, addressing the challenge of “transporting computing power.” This shift in demand—moving from the end-user access layer toward core equipment rooms and Data Center Interconnects (DCI)—has fundamentally altered the requirements for high-performance, low-loss specialty optical fibers.

Concurrently, the continued advancement of deep 5G coverage and the forward-looking deployment of 6G networks are also steadily boosting demand for optical fiber. The demand for higher fiber core counts within the fronthaul and midhaul networks of 5G base stations has surged significantly; furthermore, initiatives such as rural revitalization and the development of “Gigabit Cities” are driving the upgrade of Fiber-to-the-Home (FTTH) networks to 10-Gigabit speeds, ensuring robust and steady growth in demand within the traditional telecommunications sector.

Moreover, the rapid development of emerging application scenarios—such as the Industrial Internet, automotive fiber optics, and aerospace communications—has further expanded the potential for incremental growth in fiber optic demand. This evolution has transformed the industry’s demand structure: moving away from a singular reliance on centralized procurement by telecom operators, it is shifting toward a more diversified and high-end demand landscape.

The defining characteristic of the current wave of fiber optic price increases is that it is a *structural* price hike, driven primarily by the demand side. The construction of AI computing infrastructure and initiatives such as the “Eastern Data, Western Computing” project have triggered an explosive surge in demand for optical fibers; concurrently, demand for military FPV optical-fiber drones has also risen significantly. On the supply side, however, constraints on the production capacity of optical fiber preforms (preform rods) have made it difficult to respond rapidly to this surge. This mismatch between supply and demand has resulted in a sharp, short-term increase in prices. Unlike previous instances—where price hikes were primarily driven by centralized procurement by telecom operators and other traditional sources of demand, and where price fluctuation cycles were relatively short—the current rally is dominated by AI and other emerging sectors. It represents a long-term structural reversal occurring amidst a major industry transformation; the growth in demand is characterized by both sustainability and scale, rather than being merely a product of short-term speculation.

The primary driver behind this round of price hikes is the bottleneck in optical fiber preform capacity. Within the optical fiber industry chain, preforms determine the upper limit of supply; this segment is characterized by high technological barriers, lengthy capacity expansion cycles, and substantial capital requirements, making it difficult for supply to keep pace with the growth in demand. Looking ahead, if preform production capacity is gradually unlocked through the deployment of new equipment and technological advancements, the supply-demand imbalance will likely ease, and optical fiber prices will gradually revert to a reasonable range. However, if the development of AI and other sectors exceeds expectations—driving continued, substantial growth in demand—while the expansion of preform capacity falls short of projections, prices may remain at elevated levels or continue to trend upward amidst fluctuations.

In the optical fiber production process, the optical fiber preform (preform rod) constitutes the core stage. It accounts for 60% to 70% of the total production cost and represents the segment with the highest technological barriers and the largest capital investment requirements. Moreover, the construction cycle for a single preform production line is extensive, typically spanning 18 to 24 months—a lengthy process encompassing everything from project approval, equipment procurement, installation, and commissioning to the final ramp-up of production capacity.

From 2019 to 2024, the optical fiber industry was mired in a prolonged price war that severely eroded corporate profit margins. Consequently, most enterprises opted to curtail their capital expenditures, resulting in extremely limited additions to preform production capacity during this period.

Nevertheless, industry insiders believe that this rare surge in optical fiber prices is unlikely to subside anytime soon.

The rising cost of optical fibers reflects the scarcity of the fundamental material underpinning the digital economy. While this cost pressure may eventually be passed on to telecom operators, it is more likely to be absorbed within the overall premium associated with AI infrastructure development. As long as the global race for AI computing power continues unabated, this structural shortage—rooted in technological upgrades—cannot be easily resolved in the short term simply by ramping up existing production capacity. The critical demand of intelligent computing centers for ultra-high bandwidth and low-latency transmission has positioned them as the core engine driving the growth of fiber optics demand, thereby fundamentally reshaping the demand dynamics of the fiber industry. Compared to traditional data centers, the fiber optic requirements of a single intelligent computing center can be several—or even more than ten—times greater; a typical GPU cluster comprising 10,000 cards, for instance, requires tens of thousands of fiber-core kilometers solely for internal server interconnects. The share of fiber optic demand attributable to AI-driven intra-data center and DCI (Data Center Interconnect) scenarios is projected to surge from less than 5% in 2024 to 35% by 2027.