AI Demand Sparks Optical Fiber Shortage, Prices Set to Surge Through 2028

what happened

TrendForce, whose forecast was reported by Stocktwits, expects the global optical fiber market to run 180 million fiber-kilometers short in 2026. The shortfall could last until at least 2028 as AI infrastructure keeps demand elevated. Spot prices for finished fiber products are projected at 2.8 to more than five times their 2025 levels this year, depending on the type.

Global fiber demand is forecast at 577 million fiber-kilometers this year, with data centers taking roughly 18% to 20%, a share that could reach 30% to 35% in 2027. Capacity utilization has risen to 92%, while inventories have dropped from four months' worth in 2024 to about a single month. Major suppliers already have orders booked into early 2027, and expanding preform capacity takes 18 to 24 months.

Telecom operators are moving from short-term purchases to long-term contracts. A September agreement with Verizon covers about 129 million fiber-kilometers, and Corning agreed in the same month to supply fiber and cable worth more than $3 billion to AT&T. Coherent, Ciena and Amphenol are also in focus given their fiber-optic exposure.

why it matters

For Corning and Verizon, long-term contracts matter because they reduce uncertainty about future revenue. The forecast comes from a research firm rather than the companies themselves, so investors should check it against upcoming earnings reports and management commentary.

market impact

Fiber makers and networking suppliers (GLW, COHR, CIEN, APH): tight supply supports pricing and demand

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