In the first quarter of this year, my country’s foreign trade delivered an impressive report card, with a year-on-year growth of 15%, setting a new quarterly growth rate in the past five years.
What is even more noteworthy is that the export structure is accelerating the transformation from “new” to “excellent”, among which products such as optical fiber cables and optical modules have become dazzling new growth poles. In the first quarter, export volume increased by more than double digits year-on-year.
The industry is enjoying unprecedented popularity, and many companies have scheduled export orders until 2028.
According to relevant reports, in early May, the shipment price of special optical fiber products (G.657.A2 optical fiber) from an optical fiber manufacturer in Nantong, Jiangsu Province increased an astonishing 10 times within a year. Even so, the market is still in short supply.
The company’s orders surged fourfold year-on-year, and customers even needed to pay deposits in advance to lock in future production capacity.
This is not an isolated case, but a true microcosm of the entire optical communications industry being swept by the wave of AI computing power.
The root of this craze lies in the explosive growth of global artificial intelligence computing power infrastructure.
High-speed data transmission within and between data centers places extreme requirements on the bandwidth, bending resistance and low-loss characteristics of optical fiber cables.
Special optical fibers such as G.657.A2 are designed for high-density wiring and complex bending environments, and have become a “rigorously needed” material for the construction of AI data centers.
At the same time, 800G and 1.6T high-speed optical modules serve as the “highway” of the data center, and the demand is also booming.
Capital expenditures of overseas cloud manufacturer giants continue to be high, and they have signed long-term agreements with leading Chinese suppliers to ensure a stable supply of key components.
The severe mismatch between supply and demand has led to rare sightings of soaring prices and order backlogs lasting several years.
The high prosperity of the industry will inevitably be transmitted to the capital market.
The following A-share listed companies occupy leading positions in core links such as fiber optic cables and optical modules, and are expected to benefit deeply from this cycle.
In terms of optical fiber and cable, there are many leading companies.
Zhongtian Technology is the leading supplier of G.657.A2 optical fiber in China, with a market share of approximately 35%. It has a complete industrial chain from prefabricated rods to optical cables, with a self-sufficiency rate of 100% for optical rods and outstanding cost control capabilities.
YOFC is the absolute leader in the global optical fiber and cable industry, ranking first in global market share for many years in a row. It has achieved vertical integration of the entire “rod-fiber-cable-module” industry chain and has high technical barriers.
Hengtong Optoelectronics is the world’s second-largest optical fiber giant in terms of production capacity. Its business covers marine communications, smart grids and optical communications. It has a batch supply record of G.657.A2 optical fiber in the North American AI data center and has full overseas orders.
Fiberhome Communications is backed by China Information Technology Group, which has synergistic advantages in communication equipment and cables. It has large-scale production capabilities of G.657.A2 optical fiber, and is deeply involved in the construction of domestic operator networks, with stable orders.
Tongding Internet recently announced that it plans to invest in a project with an annual output of 600 tons of optical fiber rods and 20 million core kilometers of optical fiber, aiming to break through the supply bottleneck of high-performance optical fiber preforms such as G.657.A2 and actively enter the high-end market.
In terms of core manufacturers of optical modules, InnoLight is the global leader in high-speed optical modules and occupies a leading position in the 800G product market. The 1.6T optical module has also entered the commercial stage and is deeply tied to top overseas cloud manufacturers. Order visibility is high and the factory is in full production.
Xinyi Sheng is a benchmark enterprise in the export of optical modules, with a very high proportion of overseas business. It is deeply involved in the 800G and 1.6T high-end optical module tracks. It is one of the core suppliers of North American cloud manufacturers, with orders on hand of about 32 billion yuan, and its production capacity has been scheduled to the whole year of 2028. Its future performance is extremely certain.
There are also full industry chains and specialty manufacturers. For example, Far East Communications, a subsidiary of Far East Co., Ltd., has implemented a full industry chain layout of “optical rods – optical fibers – optical cables” and mass-produced the G.657.A1/A2 series of bend-resistant optical fibers. It also proactively laid out hollow-core optical fibers to target the next generation of computing power transmission.
Yongding Co., Ltd. has built a complete industrial chain of optical rods – optical fibers – optical cables, focusing on promoting the R&D and marketing of high-performance optical fiber products such as G.657.A1/A2.
China’s optical communications industry is relying on its technical hard power to play a key supplier role in the global wave of AI computing power infrastructure.
From the fact that the price of special optical fiber has soared several times and it is still “hard to find”, to the optical module order production being scheduled three years later, it is confirmed that the industry has entered a “super cycle” driven by strong demand.
For investors, leading companies with core technologies, a high proportion of high-end products, and long overseas order lock-ups have more outstanding visibility and flexibility in performance growth.
Of course, there are risks in the market and investment needs to be cautious.
