AI computing power drives new changes in the global fiber optic market

North American market: Fiber optic becomes a key bottleneck in computing power construction under the AI wave

• The explosive construction of North American AI computing power clusters has made fiber optic cables, like GPUs, a core constraint for project construction.
• Corning recently announced a large-scale expansion plan in the United States, building three new manufacturing plants, increasing local fiber optic interconnect production capacity by 10 times, deeply integrating with Nvidia’s AI data center project, and creating 3000 new jobs. Operator Zayo and Corning have updated their long-term fiber optic supply agreement, adding 8000 routing miles of fiber optic to Nvidia’s project and building a North American distributed AI computing power fiber optic backbone network.
• According to industry research institutions, the United States will need to add 66 million miles of fiber optic cables by 2029. The number of fiber optic cables used in AI data centers is 36 times that of traditional data centers, and there is a huge shortage of cabling technicians.
• On the supply chain side, the delivery cycle for AI specific fiber optic cables has been extended to a maximum of 52 weeks, while the delivery cycle for ordinary single-mode fiber optic cables is 6-10 weeks, and the waiting period for ultra-high core fiber optic cables is close to one year; The validity period of market quotations has been shortened to 1-3 working days, and prices fluctuate frequently. Coherent, a major overseas optical device manufacturer, disclosed that most of the supporting fiber optic interconnect production capacity for the 2027 fiscal year has been locked in advance by long-term cooperative orders from cloud manufacturers, with some orders scheduled until 2028.

Expansion Trends of Overseas Manufacturers in Europe and Asia Pacific

• The European Union has allocated a budget of 200 million euros to build an AI backbone fiber optic network, Nexans、 Local manufacturers such as Prysmian are increasing their production capacity for ultra-high core fiber optic cables, and orders for OM5 multimode and ultra-low loss single-mode fiber optic cables in the European market continue to rise. At the same time, the EU has further tightened its certification and traceability requirements for imported cables, and the threshold for overseas products to enter the European market has been raised.
• Guhe Electric is promoting the expansion of factories in Brazil, the United States, and India, with a main focus on producing 13824 core ultra high density rollable ribbon cables for high-density cabling in AI machine rooms. The new production capacity is expected to be put into operation by the end of 2028, and long-term framework orders from overseas cloud vendors have been obtained.

Global technical standard update: CPO co packaged optics move towards commercialization

• OCP Open Compute Project, in collaboration with 19 industry enterprises, has released a white paper on AI silicon optical and CPO optical interconnection, unifying specifications for optical fiber interfaces such as MT/MPO connectors, and reducing customization costs for AI cluster cabling solutions.
• OIF will fully demonstrate the complete AI optical interconnect solution of CPO and high-density MT fiber optic connectors at the ECOC 2026 exhibition. Cisco and Marvel industry executives have publicly stated that CPO co packaged optics have entered the stage of large-scale commercial use, and the next generation of AI switches will drive the rapid release of demand for special MT multi-core fibers and short distance jumpers. Corning unveiled Glass Bridge glass waveguide components at the Korea Optical Communication Exhibition, solving the high-density coupling problem between photonic chips and optical fibers in CPO scenarios.

Current situation of supply chain: Cloud vendors expand their supplier pool, leading to increased pressure on small B distributors to acquire goods

• According to LightCounting’s August industry report, due to severe shortages of optical interconnect products, overseas large-scale cloud manufacturers have expanded their fiber optic and optical component suppliers from 2-3 to 5-7 to diversify supply risks.
• Corning, Prysmian, and Guhe Electric prioritize the long-term contract orders of top cloud manufacturers, squeezing the spot resources left for small and medium-sized distributors and system integrators. The difficulty of spot procurement continues to increase, and the demand for domestic OM3/OM4/OM5 fiber jumpers and MPO harnesses in overseas markets continues to rise.

Market Summary

• The driving logic of the global fiber optic market has completely switched from the traditional telecommunications FTTH market to a dual wheel drive of telecommunications+AI data center; The construction and expansion cycle of Guangbang factory is as long as 18-24 months, and the new production capacity will not be released until 2027-2028, making it difficult to alleviate the short-term supply shortage.
• The popularity of 400G/800G/1.6T high-speed networks continues to drive demand for OM5 multimode and ultra-low loss single-mode optical fibers, resulting in a significant year-on-year increase in DCI data center interconnection business revenue.
• CPO、 The transition of silicon optical interconnection from laboratory to commercial use will drive the market demand for a batch of new multi-core optical fibers and special connectors, which will be the key direction of the industry in the next 2-3 years.

FAQ

• Q1: Why is there a shortage of fiber optic supply for overseas AI projects?
• A: AI clusters consume much more fiber than traditional server rooms, and top cloud providers sign long-term agreements in advance to lock in production capacity; The fiber optic expansion cycle is long, and it takes nearly two years to release new production capacity. Small and medium-sized distributors’ spot goods are squeezed, and the delivery cycle is significantly extended.
• Q2: What changes will PPO technology bring to fiber optic jumper products?
• A: CPO co encapsulates optics, and the demand for MT multi-core connectors and short distance special optical fibers is increasing. Traditional ordinary jumpers will not be fully compatible with the new generation of switches, and the market will emerge with more customized short distance multi-core fiber components.
• Q3: What should we focus on when exporting fiber optic cables to the European market?
• A: In addition to product performance, the EU continues to tighten its requirements for cable certification and document traceability. Export products require complete compliance documents in order to successfully complete customs clearance and project delivery.