AI Computing Power Ignites the Fiber Optic Industry Chain

The global fiber optic cable industry has emerged from the slump of the past few years and officially entered a tight balance phase of "both volume and price increases." Besides traditional communication base stations and fiber-to-the-home (FTTH), two new "money-guzzling beasts" have emerged, consuming enormous amounts of fiber.

One is AI computing clusters. Previously, data center construction didn't use a 1:1 non-convergence design between switches; bandwidth was limited to save money. However, now, with large-scale model training, to reduce latency and increase throughput, everyone is using non-blocking network architectures. In a three-layer fat-tree architecture, the connections between the TOR layer and the Leaf layer, and between the Leaf layer and the Spine layer, require an extremely large amount of fiber optic connections. To put it simply, if you use 800G or 1.6T optical modules, each DR module requires 16 optical fibers. It is estimated that by 2026, the fiber demand from 800G and 1.6T optical modules within data centers alone will exceed 100 million core kilometers.

By 2027, with the widespread adoption of CPO (Co-packaged Optics) and OIO (Optical Input/Output) technologies, in-cabinet connections will shift from copper wires to fiber optics. Corning has predicted that the fiber optic market driven by this scale-up networking will be two to three times the size of existing enterprise network services. Beyond data centers, the demand for DCI (Interconnection) between different data centers is also surging. To address energy and land constraints, NVIDIA proposed the Spectrum-XGS solution to integrate data centers located in different locations. Such cross-city, cross-state, and even cross-border connections require massive amounts of high-capacity, low-loss fiber optic cables. Domestic operators in China are actively deploying G654E fiber optics and even piloting hollow-core fiber optics to meet the needs of CSPs (Cloud Service Providers).

Another surge in demand comes from drones. Against the backdrop of military conflicts such as the Russia-Ukraine conflict, fiber optic drones have become increasingly popular. Traditional drones rely on radio control, making them vulnerable to interference in complex electronic warfare environments. Fiber optic drones, carrying long, thin optical fibers, are unaffected by electromagnetic waves and can transmit high-definition video, making them a nemesis of electronic warfare. A single drone may consume tens of kilometers of fiber optic cable. This demand is expected to surge in 2025, causing the price of G657A2 bend-resistant optical fiber to rise steadily. Beyond military applications, fiber optic drones are now being used in civilian high-precision mapping, disaster monitoring, and facility inspection due to their more stable battery life and communication.