The Zhitong Finance App learned that Everbright Securities released a research report saying that the current supply and demand pattern in the optical fiber industry is tight. AI computing power and the implementation of CPO technology are driving a high increase in demand for high-end optical fiber, compounded by the recovery of operator collection and improvement in overseas exports, and continuous restoration of product prices and profit levels. It is recommended to focus on leading companies that have independent production capacity for prefabricated optical fiber rods and have a first-mover advantage in optical communication products and special optical fibers using AI computing power.
The main views of Everbright Securities are as follows:
Optical fiber prefabricated rods are the core barrier, and the optical fiber industry pattern is highly concentrated
As the core carrier of digital information transmission, optical fiber has formed a mature and complete industrial system after nearly 200 years of technological iteration, and has become the core foundation of digital infrastructure. In terms of the industrial chain, the industry forms a complete closed loop of “prefabricated rod-optical fiber-optical cable-terminal application”. Among them, prefabricated optical fiber rods account for 70% of the profits in the industrial chain and are a core barrier link. The global optical fiber cable is dominated by American and Chinese companies. Corning of the United States ranks first in the world with a share of 19.5%. The total share of China Changfei Optical Fiber, Zhongtian Technology, Hengtong Optoelectronics, and Fiberfire Communications is close to 50%. China is currently the world's largest producer, consumer, and exporter of optical fiber.
Copper cable transmission bottlenecks are highlighted, and the growth momentum of optical fiber is shifting from traditional communication to computing power infrastructure
High-speed iteration of AI computing power highlights copper cable transmission bottlenecks. With the advantages of chip-level all-optical interconnection, low loss, and low power consumption, CPO optoelectronics co-packaging technology has become the core transformation direction for data centers to reduce costs and increase efficiency and support ultra-high bandwidth computing power transmission. According to Yole data, the global CPO market will grow from 46 million US dollars in 2024 to 8.1 billion US dollars in 2030, with a compound annual growth rate of 137%. The acceleration of the CPO commercialization process is driving a high increase in demand for high-end supporting polarized optical fibers. Currently, the polarized optical fiber market shows an oligopolarized pattern of overseas leaders and leading domestic companies. The future may usher in a reshaping of the industrial pattern under the influence of new demand. Furthermore, air core optical fiber, a cutting-edge technology that was once limited to laboratories, is also being deployed on current networks at an unprecedented speed, breaking the bottleneck of computing power and starting a generational transition in communication.
Optical fiber shows a tight balance between supply and demand, and is expected to start a new cycle of value revaluation
The optical fiber industry has strong supply rigidity due to the long expansion cycle of prefabricated optical fiber rods and low capital expenditure in the early stages of the industry. Meanwhile, AI computing power construction, recovery in operator collection, and recovery in overseas exports have led to a sharp rise in demand. High-end AI optical fiber is gradually crowding out production capacity, driving the price of various types of optical fiber to rise rapidly. The bank believes that the wave of AI computing power will reshape the logic of the optical fiber industry. The amount of optical fiber used in intelligent computing centers will increase several times compared to traditional data centers, and the industry's supply and demand gap may continue to expand. At the same time, with the rapid increase in demand for high-margin specialty optical fibers, the industry will also break away from the traditional thin profit model of ordinary optical fiber and begin a new cycle of upward boom and value revaluation as a whole.
Risk analysis: changes in import and export policies, imbalance between supply and demand, price fluctuations, increased market competition, etc.