Market status and development trend of optical fiber and optical fiber rod industry in 2018

Optical fiber cable is a kind of communication cable, which is composed of two or more glass or plastic optical fiber cores. These optical fiber cores are located in the protective coating and covered by plastic PVC outer sleeve. Optical rod is the abbreviation of optical fiber preform, which is the core raw material for manufacturing quartz series optical fiber, and is a special glass preform for pulling optical fiber (wire).

In recent years, driven by the "broadband China" strategy, China‘s optical fiber and optical rod industry has entered a period of vigorous development, becoming an important basic strategic industry of national economy and information construction, and forming a complete manufacturing system of optical fiber and optical cable products and a complete industrial chain of rod, fiber and cable production.

According to the specific data, the output of China‘s optical fiber and cable industry has increased from 95 million core kilometers in 2011 to 202 million core kilometers in 2016, with an average annual growth rate of 16.7%; in 2017, the output of optical fiber and cable industry reached 209 million core kilometers, with an estimated 240 million core kilometers in 2018.

In the optical fiber industry chain, optical fiber preform is a high-tech product located at the upper end of the industry chain. The optical rod is the first and the most core part of the whole fiber optic cable industry chain. The optical rod accounts for 65-70% of the fiber cost. Mastering the supply of optical fiber preform is the key to the enterprise‘s profitability. Before 2014, the production technology of optical fiber preform has been monopolized by foreign countries with high import dependence, which restricts the development of optical fiber and optical fiber industry in China.

Since the country started to launch anti-dumping against optical fiber preforms imported from Europe, America and Japan, foreign enterprises have sought ways to cooperate with domestic enterprises to continue to explore the Chinese market, which has brought the rapid development of China‘s optical fiber preform industry. In 2017, the self-sufficiency rate of China‘s optical fiber preforms has reached 88.07%.

With the increasing of self-sufficiency rate, the output of optical fiber preforms continues to increase. By 2017, the production of optical fiber preforms in China has reached 7800 tons, an increase of 29.6% year on year; in 2018, the production of optical fiber preforms is expected to further increase to 8806 tons.

However, compared with the output, the demand space of China‘s optical fiber and optical rod industry needs to be further widened. The data shows that from 2013 to 2016, the market scale of domestic optical fiber and cable industry has a limited growth, and even a negative growth occurred in 2016. Until 2017, driven by favorable policies, the market scale picked up. In 2018, the market scale is expected to be 217.2 billion yuan.

At present, China is the largest consumer of optical fiber preforms in the world. Data shows that in 2017, the market demand for optical fiber preforms in China has exceeded 8800 tons, an increase of 16.08% year on year; it is estimated that in 2018, the demand for optical fiber preforms in China will be about 9590 tons.

In the long run, before a new round of 5g mobile communication investment, fixed network broadband access will realize a leap from 100m to 500m and 1000m. The construction of a new generation FTTH network with the goal of building a gigabyte broadband to households is expected to become a new market engine leading the development of optical communication industry in the next two years. There is still a huge development space for optical fiber and optical fiber rod industry.

The overall trend of the future industry is better

From the perspective of market trend, the situation of tight supply and demand of domestic optical fiber preforms has not been completely reversed, which is still a good development opportunity for domestic optical fiber and cable enterprises, especially those with self-sufficiency of optical fiber rods, and also has a good impact on China‘s optical fiber and cable market. In the next few years, the overall trend of the industry will be better. China‘s optical fiber and optical rod enterprises should seize the opportunity of the times, promote intelligent manufacturing and informatization, and help China transform from a global manufacturing center to a global R & D and service center.

From the perspective of competition trend, mastering the optical rod technology is the basic index to judge whether an optical fiber and cable enterprise has core competitiveness. Therefore, enterprises with strong R & D strength have begun to introduce the optical rod R & D process system. Different from the optical rod products, as a mature industrial product, the manufacturing technology of optical fiber and cable has no big secret. At present, most enterprises have broken through the technical bottleneck of ordinary optical fiber and cable, and the future competition of optical fiber and cable market mainly focuses on the price and supply capacity.

However, high-speed optical fiber for backbone applications, and special optical fiber for specific scenarios applications and other high-tech products still have a high technical threshold. In this regard, relevant enterprises can catch up from four aspects: first, make full use of the existing equipment and skills; second, actively innovate and develop new patents with independent intellectual property rights; third, actively improve the construction and maintenance of optical cable and create extended service characteristics; fourth, hold high the banner of "going out" to participate in the international market.