G.657 specialty fiber: global demand in 2026 is 370 million fiber-kilometers. China‘s effective production capacity? Only 200 to 210 million.
That’s a gap of over 46%.
Orders are booked through 2028. Customers are putting down deposits just to secure capacity. Major Chinese fiber manufacturers have shifted 30% to 40% of their capacity from standard telecom fiber to specialty fiber — and it‘s still not enough.
Two reasons: demand surged, and supply can’t keep up.
Demand side — AI data centers are consuming fiber at an unprecedented rate
In the past, China‘s fiber demand was largely driven by the three major telecom carriers’ procurement cycles — steady growth with clear seasonality. This time is different.
AI compute centers are being built at scale globally — the U.S., Europe, the Middle East, and Southeast Asia are all in the race. A single cluster with 10,000 GPUs consumes 5 to 10 times more fiber than a traditional data center. Global data center fiber optic cable demand grew 75.9% year-over-year in 2025, and is projected to reach 91.6 million fiber-kilometers in 2026 — up another 32%.
Beyond data centers, fiber-optic drones are adding new demand. Drones use single-use fiber as consumables — it‘s not reused, it’s replaced. Scaled deployment translates to millions of kilometers of recurring demand.
Supply side — expanding production is extremely difficult
The core raw material is optical fiber preforms. A single preform plant with 3,500 tons of annual capacity costs $560 million and takes two years to build.
Preform manufacturing demands extreme technical precision, and expansion cycles run 18 to 24 months. The four major Chinese manufacturers — YOFC, Hengtong, ZTT, and FiberHome — are already running at 100% capacity, with at most 10% to 15% additional expansion possible under current conditions.
The industry went through a prolonged price war, and few companies invested in major capacity expansion. The result: demand is rising, capacity is stuck, and the gap keeps widening.
G.657.A2 specialty fiber was priced around $3 to $4 per kilometer last year. Today? Over $30 — a 10x increase in 12 months.
Standard fiber prices surged too. China‘s G.652.D bare fiber spot price hit $11.50 per kilometer in March 2026 — up 165% from January, and 418% year-over-year.
CRU projects a global supply-demand gap of 16.4% for fiber optic cable in 2026. This isn’t something that gets fixed in a few months. Long expansion cycles, raw material constraints, and continued global demand growth mean tight supply isn‘t going away anytime soon.
The global specialty fiber market has long been dominated by U.S. and European manufacturers. The U.S. has maintained export controls on high-performance specialty fiber through the Commerce Control List.
But this time, the landscape is shifting.
Chinese manufacturers now account for over 60% of global fiber production. YOFC, Hengtong, ZTT, and FiberHome hold the second, third, fourth, and fifth positions globally — combined market share close to 50%.
In the demand surge driven by AI infrastructure, Chinese fiber companies have seized the opportunity. Domestic manufacturers are achieving scale production in mid- and low-power ytterbium-doped fibers, and some leaders are breaking through technical barriers in high-power ytterbium-doped and ultra-broadband erbium-doped fibers.
Domestic substitution is no longer a future prospect — it‘s happening now.
Hecho Technology has been in specialty fiber for nearly two decades, with products spanning plastic optical fiber, glass fiber, and quartz fiber — serving industrial laser transmission, medical device integration, and scientific research applications.
This structural shift in the specialty fiber market — from standardized products to high-end customized solutions — aligns directly with Hecho’s core strength in custom, non-standard manufacturing and OEM/ODM.
If you‘re looking for a custom specialty fiber solution or have questions about current market trends, reach out to the Hecho technical team.
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