lapis

date: May 22, 2023
slug: 23
status: Published
tags: Learning
type: Post

It's just a clumsy piece I wrote during my cloud internship; since it was directly copied and pasted from the company's writing tool page, many unique features and calculation formulas could not be displayed; the sources of the report also could not be exported.

1. Definition of the Optical Fiber Cable Industry#

The optical fiber industry refers to a high-tech industry based on optical fibers as the main transmission medium. Its industrial chain includes upstream raw materials and equipment such as optical fiber preform rods, optical fibers, and optical cables, as well as downstream application fields such as communications, electricity, broadcasting, and military. The development of the optical fiber industry has been driven by national policies, the construction of new information infrastructure, and the deployment of 5G networks, making China the largest optical fiber and cable market and manufacturer in the world. At the same time, technological innovation and product upgrades in the optical fiber industry have continuously improved the capacity, speed, and stability of optical fiber transmission, addressing various data transmission needs. In the industrial chain of the optical fiber industry, upstream components and equipment such as optical fiber preform rods, optical fibers, and optical cables are key technical supports. The technology and production processes of these products are highly confidential and require substantial technical research and high-precision equipment to achieve. The downstream application fields require rich industry experience and technical strength. The applications of the optical fiber industry are extensive, including communications, electricity, broadcasting, military, and many other fields. With the deployment of 5G networks and the increasing demand for unstructured data, the demand for optical fiber transmission is also growing. Therefore, continuous technological innovation and improvement of the maturity of the industrial chain are important directions for the future development of the optical fiber industry.

2. Classification of the Optical Fiber Cable Industry#

According to application fields, optical fibers can be mainly divided into communication optical fibers and special optical fibers**.**

3. Characteristics of the Optical Fiber Cable Industry#

The optical fiber industry is a high-tech, high entry barrier, and broad prospect industry that requires technology-driven development to continuously adapt to and lead market trends. Manufacturing optical fibers requires high-precision production equipment and technology, resulting in high industry entry barriers. The optical fiber cable industry benefits from the construction of data centers and the demand for network upgrades, receiving policy support and market expansion opportunities, with a broad outlook.

• Technology-driven

  The optical fiber industry is a high-performance, high-requirement, and high-innovation industry that requires technology-driven development to continuously adapt to and lead market trends.

  As an important component of the information transmission center, optical fibers have extremely high performance indicators such as transmission speed, bandwidth, and reliability, thus requiring high standards for optical fiber technology. With continuous technological advancements and the application of new materials, optical fiber technology is constantly iterating and updating, with the new generation of optical fiber products demanding higher standards in transmission distance, bandwidth, and signal quality. Therefore, the optical fiber industry must continuously research and apply new technologies to meet market demands. Additionally, due to the substantial R&D investment required for the application of new materials and the promotion of new technologies in the optical fiber industry, technological innovation greatly enhances the long-term investment returns and market competitiveness of the optical fiber industry.

• High entry barriers

  Manufacturing optical fibers requires high-precision production equipment and technology, with strict standards and high industry entry barriers.

  According to the ODC Forum's "Top 10 Most Competitive Companies in Global Optical Fiber and Cable Industry 2021" list, five companies from China, namely Yangtze Optical Fibre and Cable, Hengtong Optic-electric, FiberHome, Zhongtian Technology, and Futong, made the list. These five companies dominate the market, and due to the nature of the industry, the future competitive landscape will become more stable, with the optical fiber cable industry gradually entering an oligopoly competition era.

• Broad prospects

  The optical fiber cable industry benefits from the demand for data center construction and network upgrades, receiving policy support and market expansion opportunities, with broad prospects.

  With the official launch of the "East Data West Computing" project, the data center construction boom has begun, and the demand for information exchange, computing, and storage is continuously increasing, leading to a growing share of optical fiber cables in data center wiring. Various departments, including the State Council, the National Development and Reform Commission, and the Ministry of Industry and Information Technology, have successively issued policies to support and regulate the development of the optical fiber cable industry. In March 2021, the Ministry of Industry and Information Technology issued the "Action Plan for Coordinated Development of 'Dual Gigabit' Networks (2021-2023)," proposing to promote basic telecom companies to continuously expand the backbone transmission network and deploy ultra-high-speed, ultra-large-capacity transmission systems of 200/400Gbps as needed, enhancing the comprehensive carrying capacity of the backbone transmission network and encouraging the use of new ultra-low-loss optical fibers in new trunk lines. With the popularization of science and technology, the overseas market for optical fiber broadband is also increasing, and developing countries are expected to become emerging markets.

4. Development History of Optical Fiber Cables#

The development of China's optical fiber cable industry has gone through five stages: Emergence Period (1977-1982), Startup Period (1983-1998), Rapid Development Period (1999-2019), and the current industry is in the Mature Period (2020 to present). The most competitive companies in the global market mainly come from China, the United States, and Japan. Chinese companies rely on the domestic large market to gain advantages, and the optical fiber cable industry has received continuous attention from government departments. In addition, the transformation and upgrading of fixed broadband, the deployment of 5G base stations, and the renovation and expansion of data centers will bring new demands to the optical fiber cable industry for a long time to come.

• Start Time: 1977

  End Time: 1982

  Stage: Emergence Period

  Industry Dynamics: During this stage, China used self-made equipment to develop the first short-wavelength, step-index optical fiber, with a length of 960 meters and attenuation below 20dB per kilometer, marking the official start of China's optical fiber cable industry.

  Industry Impact/Stage Characteristics: Mainly focused on basic research and experimental verification of optical fibers and optical devices, exploring the feasibility and prospects of optical fiber communication, laying the technical foundation for subsequent practical application and industrialization.

• Start Time: 1983

  End Time: 1987

  Stage: Startup Period

  Industry Dynamics: During this stage, China established its first optical fiber communication system project in Wuhan—the "82 Project," with a total length of 13.3 kilometers, a speed of 8.448M/S, and the transmission of 120 telephone lines, which was opened on December 31, 1982, marking China's entry into the era of optical fiber digital communication.

  Industry Impact/Stage Characteristics: Mainly focused on the design, construction, testing, and operation of optical fiber communication systems, mastering key technologies and engineering experience for subsequent large-scale construction and expansion.

• Start Time: 1988

  End Time: 1998

  Stage: Startup Period

  Industry Dynamics: During this stage, China completed dozens of optical fiber communication construction projects, with the most representative being the "Beijing-Han-Guangzhou Project" completed in 1993, with a total length of 3046 kilometers, which was the longest overhead optical cable communication line in China and the world at that time.

  Industry Impact/Stage Characteristics: Mainly focused on the planning, layout, construction, and management of optical fiber communication networks, forming a trunk network of optical fibers covering all provinces and cities in the country, laying the network foundation for subsequent wavelength division multiplexing technology and capacity upgrades.

• Start Time: 1999

  End Time: 2019

  Stage: Rapid Development Period

  Industry Dynamics: During this stage, with the explosive growth of information technology such as the Internet and mobile communications, higher requirements were placed on the capacity, speed, and stability of optical fiber communication systems. China not only strengthened the industrialization and scaling of optical fibers and optoelectronic products but also made many breakthrough advancements, synchronizing with or even leading the world in coherent optical technology, space division multiplexing technology, and silicon photonic integration technology.

  Industry Impact/Stage Characteristics: Mainly focused on technological innovation, product upgrades, standard formulation, and market expansion of optical fiber communication systems, meeting various data demands. The industry impact of this stage provided strong information infrastructure and communication technology support for the subsequent 5G era and digital economy development.

• Start Time: 2020

  End Time: 2023

  Stage: Mature Period

  Industry Dynamics: In 2021, the optical cable procurement of China's three major operators rebounded, with volume and price recovering, signaling positive trends. The demand rebounded to 245 million core kilometers, with a CAGR of -0.40% from 2016 to 2021. The subsequent transformation and upgrading of optical fiber cables, as well as the gradual implementation of 5G and data center applications, will effectively support the demand for the optical fiber cable industry, with an expected CAGR of around 3.64% until 2026, increasing demand to 293 million core kilometers.

  Industry Impact/Stage Characteristics: This stage shows characteristics of diversified business, global layout, and intelligent transformation in China's optical fiber market. Listed companies in the optical fiber industry not only engage in the optical communication field but also expand into new application scenarios such as industrial internet, emergency communication, and integrated communication.

  5. Analysis of the Optical Fiber Cable Industry Chain#

  Industry Chain Composition:

  Upstream mainly includes raw materials or equipment such as optical fiber preform rods, optical fiber coatings, optical fiber bundle materials, polyethylene, and optical fiber cable production equipment. Among these, optical fiber preform rods are the most valuable link in the optical fiber cable industry chain and the most important part of the optical fiber process, accounting for about 70% of the industry's profits. The manufacturing processes of optical fiber preform rods mainly include four methods: Vapor-phase Axial Deposition (VAD), Outside Vapor Deposition (OVD), Modified Vapor-phase Deposition (MCVD), and Plasma Chemical Vapor Deposition (PCVD). Currently, nearly 10 companies in China have mastered rod-making technology, and companies with full "rod-fiber-cable" industry chain capabilities are increasingly competitive, with a clear trend of industry concentration. Midstream mainly involves the production of optical fibers and cables and the provision of solutions. Optical fiber manufacturers use optical fiber preform rods for drawing and processing to manufacture optical fibers, which includes steps such as coating and drawing, with a gross profit margin of about 25%. Downstream optical cable companies mainly process optical fibers into cable sheathing and ultimately sell to end customers, with a gross profit margin of about 6%. Leading optical fiber manufacturers in China include Yangtze Optical Fibre, Hengtong Optic-electric, Zhongtian Technology, Futong, and FiberHome, all of which have strong advantages in revenue, output, and technology. Downstream mainly includes application fields such as the communication industry, automotive industry, energy industry, rail transportation industry (smart transportation), and marine economy (submarine cables). Among these, the communication industry is the largest demand side for optical fiber cables, accounting for over 80% of total demand. With the construction of 5G, cloud computing, and the Internet of Things, downstream demand will continue to grow, driving the development of the entire industry chain.

  Industry Chain Analysis:

  • Development bottlenecks and potential investment opportunities in the industry chain: The upstream link of the optical fiber cable industry chain is the rod-making process, which is a technology-intensive link requiring substantial R&D investment and equipment updates. Currently, only a few companies in China have mastered core technologies, forming high technical barriers. This also leads to a relatively insufficient supply capacity in the upstream link, making it difficult to meet the demands of the midstream and downstream.

    Therefore, technological innovation and capacity expansion in the upstream link present a potential investment opportunity to improve the efficiency and competitiveness of the industry chain.

  • Constraints on industry chain development: The development of the optical fiber cable industry chain is mainly influenced by downstream demand, which is affected by various factors such as policies, economy, and technology. For example, the construction of 5G networks is currently the largest demand driver, but the deployment speed and coverage of 5G networks are constrained by spectrum resources, base station construction, and terminal popularity. Additionally, the optical fiber cable industry chain faces pressures such as rising costs, falling prices, and intensified market competition, necessitating continuous improvement in product quality and performance, reduction of production costs, and expansion into new application fields to maintain market advantages.

  • Price transmission capability of the industry chain: The price transmission capability of the optical fiber cable industry chain refers to the extent to which changes in the prices of upstream raw materials or equipment affect the prices of midstream and downstream products. Generally, price transmission capability depends on the supply-demand relationship between upstream and downstream, the existence of substitutes, and contract forms. In the optical fiber cable industry chain, due to the high technical barriers and added value of the upstream rod-making process, and the relatively tight supply, changes in upstream prices have a strong transmission capability to downstream. Conversely, due to intense competition and low product differentiation in the midstream and downstream, price changes in these sectors have a weak transmission capability to upstream.

  Upstream Link	Upstream Analysis	Upstream Participants
  Optical Fiber Preform Rods	Optical fiber preform rods are the most important raw materials for optical fiber cables, and their prices and quality directly affect the cost and performance of optical fiber cables. According to Baidu Baike data, the average price of domestic optical fiber preform rods in the first half of 2022 was 155,000 yuan/kg, an increase of 14.8% compared to the first half of 2021. The price fluctuations of optical fiber preform rods are mainly influenced by market supply and demand, raw material costs, and technological advancements. The main raw materials for optical fiber preform rods include quartz tubes, high-purity silicon tetrachloride, high-purity germanium tetrachloride, and holding rods, among which the domestic production level of quartz tubes and high-purity silicon tetrachloride is relatively low, mainly relying on imports, thus being affected by international market prices and exchange rate fluctuations. - Quartz Tubes: Currently difficult to produce independently in China, mainly relying on imports, with foreign manufacturers including Germany's Heraeus, Qsil, and the United States' Momentive and Japan's Tosoh. - High-purity Silicon Tetrachloride: Purified from polysilicon production waste, technology has long been monopolized by companies in Japan and Germany, with domestic production currently in progress. Domestic companies capable of production include Jiangsu Jinko Solar Energy, Jiangxi Saiwei LDK, etc. - High-purity Germanium Tetrachloride: Used to adjust the refractive index of optical fibers, an important additive for optical fiber preform rods. Domestic companies currently capable of production include Beijing Guojinghui and Wuhan Yunjingfei. - Holding Rods: Used to fix the center position of optical fiber preform rods, an important auxiliary material in the optical fiber drawing process. Domestic companies currently capable of production include Feilihua, Beijing Jiuzhi Optoelectronics, and Jingle Quartz. The supply of optical fiber preform rods mainly comes from domestic and foreign rod manufacturers, with domestic manufacturers occupying a large market share. According to Baike data, the total production capacity of domestic optical fiber preform rods in the first half of 2022 was about 20,000 tons, with an actual output of about 16,000 tons and a capacity utilization rate of about 80%. The demand for optical fiber preform rods mainly comes from domestic and foreign optical fiber manufacturers, with domestic manufacturers accounting for the vast majority of market demand. In the first half of 2022, the total demand for domestic optical fiber preform rods was about 15,000 tons, an increase of 15% compared to the first half of 2021. The growth in demand for optical fiber preform rods is mainly driven by downstream application fields such as 5G construction, data center expansion, and submarine cable laying. From a supply-demand perspective, the current domestic optical fiber preform rod market shows a situation of oversupply, but with the continuous growth of downstream demand and the expansion of international markets, the supply-demand balance is expected to improve in the future. The optical fiber preform rod industry is a technology-intensive, capital-intensive industry with significant economies of scale, leading to high industry concentration, with leading companies having strong competitive advantages. In the first half of 2022, the top five manufacturers in the domestic optical fiber preform rod market (Yangtze, Hengtong, Zhongtian, Futong, and FiberHome) accounted for a total market share of 95%, with Yangtze Optical Fiber maintaining a leading position with a 45% market share, and Hengtong Optic-electric and Zhongtian Technology holding second and third places with 20% and 15% market shares, respectively. These leading companies not only possess high rod-making technology levels and economies of scale but also have integrated production capabilities of "rod-fiber-cable," effectively reducing costs and improving efficiency. Additionally, these companies actively explore international markets, establishing cooperative relationships with foreign optical fiber manufacturers to enhance their brand influence and market share.	Jinko Solar Co., Ltd., Jiangxi Saiwei LDK Solar High-Tech Co., Ltd., Beijing Guojinghui Infrared Optical Technology Co., Ltd., Wuhan Yunjingfei Optical Fiber Materials Co., Ltd., Hubei Feilihua Quartz Glass Co., Ltd., Jiuzhi Optoelectronic Materials Technology Co., Ltd., China National Building Material Group Corporation Quzhou Jingle Quartz Co., Ltd.
  Optical Fiber Coatings	Optical fiber coatings are used to protect optical glass fibers from external environmental impacts, maintaining sufficient mechanical strength and optical performance, and are an important component of communication optical fibers. The main raw materials for optical fiber coatings are UV-curable materials, including monomers, oligomers, photoinitiators, and additives. The market size of optical fiber coatings corresponds to the demand for optical fibers, with approximately 0.45 tons of optical fiber coatings needed for every 10,000 core kilometers of optical fiber produced. In 2022, China's optical fiber output reached 345 million core kilometers, generating a demand of about 17,300 tons for optical fiber coatings in the domestic market. Based on a sales price of 40,000 yuan/ton, the market size is less than 700 million. The market competition for optical fiber coatings is relatively fierce, with major suppliers including Feikai Materials, Germany's BASF, and the United States' Hirschmann. Among them, Feikai Materials is the largest domestic producer of UV-curable optical fiber coatings, occupying a 60% share of the domestic market and ranking first globally.	Shanghai Feikai Material Technology Co., Ltd., Germany BASF, United States Hirschmann
  Optical Fiber Bundle Materials	Optical fiber bundle materials are used to protect the optical fiber cores in optical fiber cables, mainly made from high-density polyethylene (HDPE), low-density polyethylene (LDPE), polypropylene (PP), and other plastics. The market size of optical fiber bundle materials is related to the demand for optical fiber cables, driven by the construction of new infrastructures such as 5G, the Internet of Things, and cloud services, leading to a continuous increase in demand for optical fiber cables. The market competition for optical fiber bundle materials is relatively fragmented, with major suppliers including Zhongtian Technology, Hengtong Optic-electric, FiberHome, Futong Information, and foreign companies such as Corning and Furukawa Electric. Among them, Zhongtian Technology is the largest domestic producer of optical fiber bundle materials, holding over 30% of the domestic market share.	Jiangsu Zhongtian Technology Co., Ltd., Jiangsu Hengtong Optic-electric Co., Ltd., FiberHome Communication Technology Co., Ltd., Tianjin Futong Information Technology Co., Ltd., Japan Furukawa Electric
  Polyethylene	Polyethylene is a thermoplastic resin made from the polymerization of ethylene, widely used in the manufacture of films, containers, pipes, wires and cables, daily necessities, etc., and is one of the main varieties of synthetic resins. The market size of polyethylene is related to the demand for synthetic resins, driven by the construction of new infrastructures such as 5G, the Internet of Things, and cloud services, leading to a continuous increase in demand for synthetic resins. The market competition for polyethylene is relatively fragmented, with major suppliers including Sinopec, PetroChina, and China National Offshore Oil Corporation, as well as foreign companies such as Corning and ExxonMobil. Among them, Sinopec is the largest producer of polyethylene in China, holding over 30% of the domestic market share. The trade deficit for polyethylene is significant, as China is the world's largest importer of polyethylene, with imports reaching 13.47 million tons in 2022, accounting for nearly one-third of the total global imports of polyethylene; the import volume of polypropylene accounts for nearly one-fourth of the total imports of various countries.	China Petroleum and Chemical Corporation, China Petroleum and Chemical Corporation, China National Offshore Oil Corporation, ExxonMobil
  Optical Fiber Cable Production Equipment	Optical fiber cable production equipment refers to the machinery used to manufacture optical fiber cables, including optical fiber drawing machines, optical fiber coating machines, optical fiber winding machines, optical fiber cabling machines, and optical fiber sheathing machines. The market size of optical fiber cable production equipment is related to the demand for optical fiber cables, driven by fields such as 5G, gigabit optical networks, and new infrastructure construction, leading to a continuous increase in demand for optical fiber cables. It is expected that the global market size for optical fiber cables will reach $42 billion in 2023. The market competition for optical fiber cable production equipment is relatively concentrated, with major suppliers including Zhongtian Technology, Hengtong Optic-electric, FiberHome, as well as foreign companies such as Siemens and Collins. Among them, Zhongtian Technology is the largest manufacturer of optical fiber cable production equipment in China, holding over 40% of the domestic market share. The technological development trend of optical fiber cable production equipment is towards high speed, high efficiency, and intelligence to meet the production needs of different types and specifications of optical fiber cables, improving production efficiency and quality while reducing costs and energy consumption.	Jiangsu Zhongtian Technology Co., Ltd., Jiangsu Hengtong Optic-electric Co., Ltd., FiberHome Communication Technology Co., Ltd., Siemens, Collins

  Midstream Link	Midstream Analysis	Midstream Participants
  Production and Solution Providers for Optical Fiber Cables	The midstream of optical fiber cables mainly involves the production of optical fiber cables and the provision of solutions. In the first half of 2022, the top five manufacturers in the domestic optical fiber preform rod market (Yangtze, Hengtong, Zhongtian, Futong, and FiberHome) accounted for a total market share of 95%, with Yangtze Optical Fiber maintaining a leading position with a 45% market share, and Hengtong Optic-electric and Zhongtian Technology holding second and third places with 20% and 15% market shares, respectively. These leading companies not only possess high rod-making technology levels and economies of scale but also have integrated production capabilities of "rod-fiber-cable," effectively reducing costs and improving efficiency. Additionally, these companies actively explore international markets, establishing cooperative relationships with foreign optical fiber manufacturers to enhance their brand influence and market share. The profitability level of the optical fiber cable industry is mainly influenced by market supply and demand, raw material costs, and technological innovation. In 2022, the average gross profit margin of the domestic optical fiber cable industry was 17.8%, a decrease of 0.8 percentage points compared to the first half of 2021. The business model of the optical fiber cable industry mainly achieves profitability through product sales and solution services. Product sales mainly involve providing various specifications and types of optical fiber cable products to downstream customers, including standard, special, and submarine types. Solution services mainly involve providing comprehensive network planning, design, construction, and operation services to downstream customers, including FTTH, 5G backbone networks, and data center interconnections. According to research institutions, the average revenue of the domestic optical fiber cable industry in the first half of 2022 was 18.93 billion yuan, with product sales accounting for 76.3% and solution services accounting for 23.7%. The technological route of the optical fiber cable industry mainly includes two aspects: the manufacturing process of optical fiber preform rods and the structural design of optical fiber cables. The former determines the transmission characteristics and costs of optical fibers, while the latter determines the performance and application range of optical fiber cables. Currently, the commercial production of optical fiber preform rods has developed into a "two-step method," with the first step being the production of the core rod and the second step being the addition of the outer cladding to the core rod to form the preform rod. The core rod manufacturing processes mainly include four methods: Vapor-phase Axial Deposition (VAD), Outside Vapor Deposition (OVD), Modified Vapor-phase Deposition (MCVD), and Plasma Chemical Vapor Deposition (PCVD). Among these, the MCVD operation method is simple; OVD/VAD has low requirements for raw material purity, effectively controlling costs; and PCVD has high raw material utilization and more precise refractive index distribution. The structural design of optical fiber cables mainly includes two types: single-core optical fiber cables and multi-core optical fiber cables. Single-core optical fiber cables refer to optical fibers with only one core layer, suitable for long-distance and high-speed transmission. Multi-core optical fiber cables refer to optical fibers with multiple core layers, suitable for short-distance and high-capacity transmission. The structural design of optical fiber cables also needs to consider different application scenarios and environmental conditions, such as underwater, underground, and aerial, as well as different functional requirements, such as tensile, compressive, bending, and temperature resistance.	Tianjin Futong Information Technology Co., Ltd., FiberHome Communication Technology Co., Ltd., Jiangsu Zhongtian Technology Co., Ltd., Jiangsu Hengtong Optic-electric Co., Ltd., Yangtze Optical Fiber and Cable Co., Ltd.

  Downstream Link	Downstream Analysis	Downstream Participants
  Communication Operators	Communication operators are the core consumer group of optical fiber cables, mainly used for building access networks, backbone networks, and core networks to meet the demands of new technologies such as FTTH, 5G, and IPv6. Communication operators include China Telecom, China Mobile, China Unicom, China Broadcasting Network, and China Tower. Communication operators are the largest demand side for optical fiber cables, accounting for about 80% of the overall market. Communication operators mainly use optical fiber cables to build fixed broadband networks and mobile communication networks to provide high-speed, high-quality information transmission services. In the entire optical fiber cable market, the role of communication operators is: - To promote technological innovation and product upgrades of optical fiber cables. With the development of new technologies such as 5G, the Internet of Things, and cloud computing, communication operators have higher requirements for the performance, quality, and stability of optical fiber cables, prompting upstream manufacturers to continuously develop new types of optical fiber cables, such as single-mode fibers, dispersion-shifted single-mode fibers, and ultra-long wavelength fibers. - To drive the large-scale production and consumption of optical fiber cables. With the implementation of national policies such as "Broadband China," "Three Networks Integration," and "Dual Gigabit," communication operators have increased their efforts in building fixed broadband networks and 5G networks, increasing the demand for optical fiber cables. According to statistics, in 2022, the newly built optical cable line length in China reached 4.772 million kilometers, with a total optical cable line length of 54.88 million kilometers nationwide. - To influence the price trends and competitive landscape of optical fiber cables. As the largest purchaser, communication operators have significant bargaining power over the prices of optical fiber cables and will also choose suitable suppliers through bidding and competitive pricing, thus affecting the profit levels and market shares of upstream manufacturers. Generally, when the investment scale of communication operators increases, it drives the growth of demand for optical fiber cables and price increases; conversely, it leads to reduced demand and price declines.	China Telecom Group Co., Ltd., China Mobile Communications Group Co., Ltd., China United Network Communications Co., Ltd., China Broadcasting Network Co., Ltd., China Tower Co., Ltd.
  Broadcasting Operators	Broadcasting operators are an important consumer group for optical fiber cables, mainly used for building cable television networks and internet access networks to meet the demands of three-network integration and smart cities. In the entire optical fiber cable market, the role of broadcasting operators is: - To promote the diversification and differentiation of optical fiber cables. The demand of broadcasting operators for optical fiber cables differs from that of communication operators, focusing more on the bandwidth, reliability, and anti-interference capabilities of optical fiber cables, while also needing to meet various business scenario requirements, such as indoor, outdoor, underground, and underwater. This drives upstream manufacturers to develop optical fiber cable products suitable for different environments and applications, such as broadband single-mode fibers, low-water-peak single-mode fibers, and submarine fibers. - To increase new growth points and market space for optical fiber cables. As new entrants holding 5G licenses, broadcasting operators are expected to play an important role in 5G network construction, especially with the coverage advantages of the 700MHz frequency band and the integration advantages of broadcasting resources. It is predicted that from 2021 to 2025, China Broadcasting will invest about 200 billion yuan in 5G network construction, with about 50 billion yuan allocated for purchasing optical fiber cables. In addition, broadcasting operators will accelerate the digital transformation and upgrading of cable television networks, promoting the popularization of gigabit broadband services, further driving the demand for optical fiber cables. - To enhance the competitiveness and innovation capabilities of optical fiber cables. As new market participants, broadcasting operators have their own standards and requirements for purchasing optical fiber cables and will also form competitive and cooperative relationships with communication operators. This incentivizes upstream manufacturers to improve their product quality, technological level, and service capabilities to meet the needs and expectations of different customers, thereby enhancing the competitiveness and innovation capabilities of the entire industry.	China Broadcasting Network Co., Ltd., various provincial and municipal broadcasting network companies
  Data Centers	Data centers are emerging consumers of optical fiber cables, mainly used for building internal interconnections within data centers and interconnections between data centers to meet the demands of cloud computing and big data. The actual application scenario involves using optical fiber cables to connect servers, switches, routers, and other devices to provide high-speed, high-capacity, and high-reliability data transmission. In the entire optical fiber cable market, the role of data centers is: - To promote the high-speed and high-density development of optical fiber cables. The demand for optical fiber cables in data centers differs from that in traditional communication fields, focusing more on the speed, density, and flexibility of optical fiber cables, while also needing to meet various network architecture and protocol requirements, such as Ethernet, PCIe, and InfiniBand. This drives upstream manufacturers to develop optical fiber cable products suitable for different data center scales and applications, such as single-mode fibers, multi-mode fibers, and active optical fibers. - To increase new growth points and market space for optical fiber cables. As an important component of new information infrastructure, data centers are expected to play a key role in digital economy, new infrastructure, and industrial internet fields, especially driven by new technologies such as cloud computing, big data, and artificial intelligence. It is predicted that from 2021 to 2025, the demand for optical fiber cables in data center construction in China is expected to reach 20 to 40 million core kilometers. In addition, data centers will accelerate the development towards edge computing, promoting the popularization of distributed network architectures, further driving the demand for optical fiber cables.	Beijing Century Interconnection Broadband Data Center Co., Ltd., GDS Services Co., Ltd., Beijing Guanghuan New Network Technology Co., Ltd., Shanghai Data Port Co., Ltd., Guangdong Aofei Data Technology Co., Ltd.
  Government Agencies and Enterprise Clients	Government agencies and enterprise clients are potential consumers of optical fiber cables, including government departments, financial institutions, power systems, transportation, education, and healthcare sectors' data communication and information construction needs. Government agencies and enterprise clients are important consumers of optical fiber cables, mainly using optical fiber cables to connect office buildings, data centers, monitoring systems, and other devices to provide secure, efficient, and stable data transmission. In the entire optical fiber cable market, the role of government and enterprise clients is: - To promote the diversification and personalization of optical fiber cables. The demand of government agencies and enterprise clients for optical fiber cables differs from that of communication operators, focusing more on the security, reliability, and flexibility of optical fiber cables, while also needing to meet various application scenarios and functional requirements, such as fire and explosion resistance, electromagnetic interference resistance, and tensile strength. This drives upstream manufacturers to develop optical fiber cable products suitable for different industries and fields, such as special optical fibers, indoor cables, and micro cables. - To enhance the competitiveness and innovation capabilities of optical fiber cables. As new market participants, government agencies and enterprise clients have their own standards and requirements for purchasing optical fiber cables and will also form competitive and cooperative relationships with other industries. This incentivizes upstream manufacturers to improve their product quality, technological level, and service capabilities to meet the needs and expectations of different customers, thereby enhancing the competitiveness and innovation capabilities of the entire industry.	Various levels of government and private enterprises

  6. Scale of the Optical Fiber Cable Industry#

  According to the "Top 10 Most Competitive Companies in Global/China Optical Communication" lists released by the Network Telecom Information Research Institute from 2017 to 2022, Yangtze Optical Fiber's market share in the global market fluctuated between 9.14% and 14% from 2017 to 2022, ranking second. Using the formula for estimating the optical fiber cable market size = Yangtze Optical Fiber's optical fiber cable sales / Yangtze Optical Fiber's optical fiber cable market share, the market size for optical fiber cables in 2022 was estimated to be 100.072 billion yuan. From 2017 to 2022, the market size of the optical fiber cable industry experienced fluctuating growth. The industry size was 81.622 billion yuan in 2017, slightly decreased to 81.135 billion yuan in 2018, and then saw a significant shrinkage in 2019, dropping to 64.741 billion yuan. The industry size was 90.34 billion yuan and 79.466 billion yuan in 2020 and 2021, respectively, and rebounded to 100.072 billion yuan in 2022. We used a linear regression model to predict the market size of the optical fiber cable industry from 2023 to 2027. According to the prediction results, the market size will reach 94.18 billion yuan in 2023, then gradually increase to 97.404 billion yuan in 2024, 100.628 billion yuan in 2025, 103.852 billion yuan in 2026, and 107.076 billion yuan in 2027. This prediction indicates a stable growth trend for the optical fiber cable industry overall.

  The changes in the market size of China's optical fiber cable industry are mainly influenced by demand pull, supply changes, and technological breakthroughs.

  Demand Pull: With the construction and application of new information infrastructures such as 5G networks, gigabit optical networks, the Internet of Things, and cloud computing, the demand for optical fiber cables continues to grow. According to data from the Ministry of Industry and Information Technology, the newly built optical cable line length reached 4.28 million kilometers in 2020, an increase of 11% compared to 2019. The 2021 "Government Work Report" explicitly required increasing efforts in the construction of 5G networks and gigabit optical networks, enriching application scenarios. The "Dual Gigabit Network Coordinated Development Action Plan (2021-2023)" issued by the Ministry of Industry and Information Technology stated that by the end of 2023, gigabit optical fiber networks will have the capacity to cover 300 million households, with more than 20 million ports of 10G passive optical networks (10G-PON) and above, and gigabit broadband users exceeding 50 million. These policies and goals will further stimulate the market demand for optical fiber cables.

  Supply Changes: With fluctuations in domestic and foreign market demand, the supply of optical fiber cables has also shown different changes. From 2017 to 2019, due to the rapid development of domestic and foreign communication infrastructure construction and the implementation of domestic anti-dumping policies, the domestic production of optical fiber preform rods increased from 4,271 tons to 11,098 tons, a growth of 159.8%. In 2020, affected by the COVID-19 pandemic, global communication market demand was sluggish, and domestic and foreign operators reduced procurement volumes, leading to a decrease in domestic production of optical fiber preform rods to about 12,000 tons. Since 2021, with the improvement of the pandemic prevention situation and the recovery of the communication market, domestic and foreign operators have increased investment, promoting the recovery of domestic production of optical fiber preform rods.

  Technological Breakthroughs: With continuous advancements and innovations in communication technology, higher requirements have been placed on the performance and quality of optical fiber cables. To meet the application needs of different fields and scenarios, domestic and foreign companies are continuously developing new, special, and high-end optical fiber cable products. For example, in the 5G field, to address the high loss, low bandwidth, and susceptibility to interference issues of traditional copper cables, Hengtong Optic-electric launched a 5G front-haul solution based on passive optical network (PON) technology—the Hengtong PON+ solution. This solution utilizes specially designed PON+ splitters and PON+ modules to achieve multiplexing and separation of multiple wavelength signals on a single-core single-mode fiber, effectively improving signal transmission efficiency and quality.

  Future Predictions: Based on the revenue and market share of Yangtze Optical Fiber, it is estimated that from 2023 to 2027, the scale of China's optical fiber cable industry will grow from 94.18 billion yuan to 107.076 billion yuan, with the growth rate gradually slowing down. To predict the market size for the next five years, we used a linear regression model, assuming a linear relationship between market size and time, fitting a linear equation based on known market size data from 2017 to 2022, and then using this equation to predict future market sizes. According to the prediction results, the market size will reach 94.18 billion yuan in 2023, then gradually increase to 97.404 billion yuan in 2024, 100.628 billion yuan in 2025, 103.852 billion yuan in 2026, and 107.076 billion yuan in 2027. This prediction indicates a growth trend for the optical fiber cable industry overall.

  7. Policy Review of Optical Fiber Cables#

  • Policy Name: "Guiding Opinions on Accelerating 5G Network Construction"

    Issuing Authority: National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Finance, Ministry of Natural Resources, Ministry of Housing and Urban-Rural Development, Ministry of Transport, Ministry of Water Resources, Ministry of Agriculture and Rural Affairs, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission

    Effective Date: July 2020

    Impact: 9

    Policy Nature: Guiding Policy

    Policy Content: This policy aims to accelerate 5G network construction, enhance network coverage and quality, promote the integrated development of 5G with cloud computing, the Internet of Things, artificial intelligence, and other new technologies, support the innovative application of 5G in various fields, and promote the deep integration of the digital economy and the real economy.

    Policy Interpretation: This policy is an important guiding opinion from the state on 5G network construction, reflecting the government's high attention and support for information communication infrastructure construction, providing a favorable policy environment and market opportunities for the optical fiber cable industry. This policy is conducive to enhancing the coverage and quality of 5G networks, promoting the integrated development of 5G with new technologies, supporting the innovative application of 5G in various fields, and promoting the deep integration of the digital economy and the real economy.

  • Policy Name: "14th Five-Year Plan for National Informatization"

    Issuing Authority: Central Cyberspace Affairs Commission

    Effective Date: January 2022

    Impact: 8

    Policy Nature: Guiding Policy

    Policy Content: Digital infrastructure has become a strategic focus for digital development in various countries, and China aims to strengthen, consolidate, and maintain its position as a global center for the Internet and submarine cable networks in the new era.

    Policy Interpretation: The overall goal of this policy is to achieve decisive progress in building a digital China by 2025, with a significant leap in the level of informatization development. Major tasks include building a ubiquitous intelligent digital infrastructure system, establishing an efficient data element resource system, constructing an innovative development system that releases digital productivity, cultivating an advanced and secure digital industry system, building an industrial digital transformation development system, establishing a collaborative governance system for a digital society, creating a collaborative and efficient digital government service system, building an inclusive and convenient digital livelihood guarantee system, expanding mutually beneficial international cooperation in the digital field, and establishing a sound and orderly governance system for digital development, with ten key projects identified as important levers for implementing these tasks.

  • Policy Name: "14th Five-Year Plan for Digital Economy Development"

    Issuing Authority: State Council

    Effective Date: January 2022

    Impact: 9

    Policy Nature: Guiding Policy

    Policy Content: This policy promotes the orderly expansion of backbone network capacity, coordinated advancement of gigabit optical fiber networks and 5G network infrastructure construction, promotes the commercial deployment and large-scale application of 5G, and proactively lays out the technological reserves for sixth-generation mobile communication (6G) networks. It increases support for 6G technology R&D and actively participates in promoting the international standardization of 6G.

    Policy Interpretation: This policy plan focuses on data as a key element, with the deep integration of digital technology and the real economy as the main line, strengthening the construction of digital infrastructure, improving the digital economy governance system, and promoting the digital industrialization and industrial digitalization, empowering the transformation and upgrading of traditional industries, and cultivating new industries, new formats, and new models. The development goal is to achieve a comprehensive expansion of the digital economy by 2025, with the added value of the core industries of the digital economy accounting for 10% of GDP, and to fully enter a new stage of coordinated development of the four aspects of data value realization, industrial digitalization, digital industrialization, and digital governance.

  • Policy Name: "Carbon Peak Implementation Plan in the Industrial Sector"

    Issuing Authority: Ministry of Industry and Information Technology

    Effective Date: August 2022

    Impact: 9

    Policy Nature: Guiding Policy

    Policy Content: Strengthen the coordinated interaction of source, network, load, and storage, guide enterprises and parks to accelerate the development and operation of integrated systems such as distributed photovoltaics and smart energy management, promote the efficient and complementary use of multiple energy sources, and facilitate the large-scale and high-proportion consumption of renewable energy nearby.

    Policy Interpretation: The overall goal of this policy is to achieve positive progress in optimizing the industrial structure and energy consumption structure during the "14th Five-Year Plan" period, significantly improve the efficiency of energy resource utilization, establish a number of green factories and green industrial parks, and develop, demonstrate, and promote a number of low-carbon, zero-carbon, and negative-carbon technology processes and equipment products with significant emission reduction effects, laying a solid foundation for carbon peaking in the industrial sector. By 2030, the energy consumption per unit of industrial added value in large-scale industries is expected to decrease by 13.5% compared to 2020, and the carbon dioxide emissions per unit of industrial added value will decrease more than the overall societal reduction rate, with a significant decrease in carbon dioxide emission intensity in key industries. During the "15th Five-Year Plan" period, based on achieving carbon peaking in the industrial sector, the capacity for carbon neutrality will be strengthened, establishing a modern industrial system characterized by high efficiency, greenness, circularity, and low carbon. Ensure that carbon dioxide emissions in the industrial sector peak before 2030.

  • Policy Name: "Notice on Further Improving the Management of Optical Fiber Cable Product Identification for Telecom User Lines"

    Issuing Authority: Ministry of Industry and Information Technology

    Effective Date: September 2021

    Impact: 7

    Policy Nature: Regulatory Policy

    Policy Content: This policy is a supplement and improvement to the "Management Measures for Optical Fiber Cable Product Identification for Telecom User Lines," mainly aimed at standardizing the management of optical fiber cable product identification for telecom user lines, ensuring the quality and safety of optical fiber cable products for telecom user lines, and protecting the legitimate rights and interests of consumers.

    Policy Interpretation: This policy is an administrative regulation issued by the Ministry of Industry and Information Technology to further standardize the market order of optical fiber cable products for telecom user lines, ensure the quality and safety of optical fiber cable products for telecom user lines, and protect the legitimate rights and interests of consumers. This policy is conducive to improving the identification management level of optical fiber cable products for telecom user lines, enhancing the traceability and recognizability of products, and promoting fair market competition.

  • Policy Name: "Guiding Opinions on Accelerating the Construction of New Infrastructure"

    Issuing Authority: National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Science and Technology, Ministry of Education, Ministry of Transport, Ministry of Water Resources, Ministry of Agriculture and Rural Affairs, Ministry of Ecology and Environment, Ministry of Housing and Urban-Rural Development, Ministry of Commerce, Ministry of Culture and Tourism, National Health Commission, Ministry of Emergency Management

    Effective Date: April 2020

    Impact: 9

    Policy Nature: Guiding Policy

    Policy Content: This policy aims to accelerate the construction of new infrastructure, enhance national development strategic capabilities and economic and social development levels, support high-quality development and supply-side structural reforms, and promote the deep integration of the digital economy and the real economy.

    Policy Interpretation: This policy is an important guiding opinion from the state on the construction of new infrastructure, reflecting the government's high attention and support for digital transformation and innovation-driven development, providing a favorable policy environment and market opportunities for the optical fiber cable industry. This policy is conducive to enhancing the construction level and service capabilities of new infrastructure, promoting the deep integration of the digital economy and the real economy, and supporting high-quality development and supply-side structural reforms.

    8. Competitive Landscape of Optical Fiber Cables#

    The competitive landscape of China's optical fiber cable industry is favorable, and the rising demand is expected to drive the overall healthy development of the industry. In the "Top 10 Most Competitive Companies in Global Optical Communication 2022" list, five companies from China made the list: Yangtze Optical Fiber, Hengtong Optic-electric, FiberHome, Zhongtian Technology, and Futong Communications, with market shares of 9%, 8%, 6%, 6%, and 7%, respectively. Currently, the global optical fiber cable industry market is highly concentrated. According to data from the Optical Communication Committee of the China Communication Society, the market share of the top 10 companies globally has fluctuated from 94% in 2018 to 86%; although the concentration has decreased, it remains highly concentrated. Among optical fiber cable companies, most have completed a relatively complete industrial chain. Among them, Yangtze Optical Fiber and Hengtong Optic-electric have the most complete industrial chains, from optical rods to optical fibers, optical cables, and optical devices, with independent R&D, production, and sales. Additionally, from the perspective of sales regions, most companies adopt a joint marketing strategy both domestically and internationally; after meeting domestic demand, they export to foreign markets.

    Analysis of Formation Reasons:

    First, the support and guidance of national policies. The Chinese government places great importance on the construction of new infrastructure, especially the development of 5G and gigabit optical networks, providing significant market space and policy dividends for the optical fiber cable industry. At the same time, the government has also introduced a series of anti-dumping and anti-subsidy measures to protect the legitimate rights and interests of domestic optical fiber cable companies and resist foreign competitive pressures.

    Second, the continuous growth of domestic market demand. With the further development of internet services, the construction of mobile communication networks, and the continuous realization of new applications such as the Internet of Things and cloud computing, the optical fiber cable industry will usher in broader development opportunities. According to statistics, in 2020, the length of optical cable lines in China reached 51.69 million kilometers, and the cumulative output from January to October 2021 was 26,006.6 million kilometers, with a cumulative growth of 13.3%.

    Third, the technological innovation and industrial chain layout of domestic companies. Chinese optical fiber cable companies have made significant progress in technology R&D, production capacity, product quality, and brand influence, with some companies achieving a complete industrial chain layout from optical rods to optical fibers, optical cables, and optical devices, enhancing their independent innovation capabilities and market competitiveness. At the same time, domestic companies are also actively expanding into overseas markets, increasing their international influence and market share.

    Fourth, changes in the domestic and international market environment. Affected by the COVID-19 pandemic, global demand for optical fibers and cables has been sluggish, and some countries have implemented restrictions or bans on imports of Chinese products, posing certain challenges to Chinese optical fiber cable companies. However, this has also created opportunities for domestic companies, prompting them to accelerate transformation and upgrading, enhancing product added value and differentiated competitiveness.

    Trend Prediction: The degree of concentration will further increase, industry differentiation will intensify, and international development will accelerate.

    First, market concentration will further increase, and the industry structure will stabilize. With the advancement of new infrastructures such as 5G and gigabit optical networks, the demand for optical fibers and cables will continue to grow, while also placing higher requirements on product quality, technology level, and service capabilities. This will benefit leading companies to further consolidate and expand their market shares, forming economies of scale and brand effects, enhancing industry barriers, and suppressing the entry of potential competitors. It is expected that by 2025, the market concentration of China's optical fiber cable industry (CR10) will exceed 90%.

    Second, technological innovation will become the core competitiveness, and industry differentiation will intensify. With the advancement of new infrastructures such as 5G and gigabit optical networks, higher requirements will be placed on the performance, quality, and reliability of optical fibers and cables. This will prompt companies to increase investment in technology R&D, continuously launch new products, new technologies, and new applications to meet the needs of different customers and scenarios. At the same time, companies will also expand into new fields and markets through mergers and acquisitions and cross-industry cooperation to achieve diversified development. It is expected that by 2025, China's optical fiber cable industry will form a competitive landscape in various sub-markets, with leaders in special optical fibers represented by Yangtze Optical Fiber, Hengtong Optic-electric, and FiberHome, leaders in marine communication represented by Zhongtian Technology and Futong Information, and leaders in military communication represented by Hanxin Optoelectronics and Tefa Information.

    Third, international development will accelerate, and the industry's influence will further increase. As the technological level and product quality of China's optical fiber cable industry continue to improve, domestic market demand gradually saturates, and foreign market demand continues to grow, Chinese optical fiber cable companies will accelerate their international development pace and actively expand into overseas markets. At the same time, Chinese optical fiber cable companies will also actively participate in the formulation of international standards and international cooperation, enhancing their voice and influence globally. It is expected that by 2025, Chinese optical fiber cable companies will account for over 60% of the global market share.

    9. Analysis of Optical Fiber Cable Companies#

    Analysis of Yangtze Optical Fiber, slightly