IndexBox has just published a new report: ‘World – Optical Fiber Cables – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

As countries implement 5G networks, the increased demand is predicted to significantly drive the market for optical fiber to reach 1.5M tonnes by 2030. This new generation of mobile broadband will require building dense networks of base stations connected by optical fiber cables.  In the near future, the U.S., China, Japan and the EU should become the most lucrative markets for sales and distribution of fiber optics.

Key Trends and Insights

The optical fiber market faces a new era of development as 5G networks are implemented all over. The next-generation network will require a significantly larger amount of fiber optic base stations because it uses a high-frequency signal that cannot cover large distances. There is no alternative to optical fiber, as it is the only effective cable material that provides the necessary high data transfer rates. As a consequence, the demand for optical fiber is expected to sky-rocket and the global optical fiber market could reach 1.5M tonnes by 2030.

The U.S., China and Japan demonstrate the highest potential for consumption of optical fiber due to their emphasis on developing infrastructure for fifth-generation networks. The U.S. in all likelihood may become the largest consumer of optical fiber due to the size of its territory. Saudia Arabia, the EU and Australia are also actively implementing 5G technology.

Currently, China has installed approx. 70% of the world’s base stations, making it the largest consumer of the optical fiber at 135K tonnes in 2020 and leading all other countries with its rate for implementing 5G. According to the 14th Five-Year Plan (2021-2025), the number of 5G base stations in China will double by 2022 and by 2023 the total will surpass 5.1M.

The U.S. comes in second for consumption with 125K tonnes in 2020. The Biden administration has announced that it will allocate $100B to develop the infrastructure for broadband access within its eight-year plan. This should accelerate the expansion of the country’s 5G network coverage.

The Japanese government declared that implementing 5G is one of the government’s highest priorities while Japanese telecom companies plan to invest more than $14B into infrastructure for 5G networks, including base stations, server equipment and optical fiber.

Optical fiber is the ideal material that can achieve the high performance claimed by 5G, as it provides over 1K times as much bandwidth as a copper link. The lack of alternatives and overall demand for optical fiber will make this segment of the cable industry more and more attractive for investment.

Global Optical Fiber Cable Consumption

In 2020, the global optical fiber cables market decreased by -3.9% to $13.7B for the first time since 2017, thus ending a two-year rising trend. In general, consumption, however, continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2018 with an increase of 9.7% year-to-year. Over the period under review, the global market reached the peak level at $14.4B in 2012; however, from 2013 to 2020, consumption failed to regain momentum.

The countries with the highest volumes of optical fiber cables consumption in 2020 were China (135K tonnes), the U.S. (125K tonnes) and Mexico (61K tonnes), together comprising 31% of global consumption.

In value terms, the U.S. ($2.3B), China ($1.4B) and France ($788M) were the countries with the highest levels of market value in 2020, together accounting for 33% of the global market.

The countries with the highest levels of optical fiber cables per capita consumption in 2020 were France (625 kg per 1000 persons), Turkey (486 kg per 1000 persons) and Mexico (453 kg per 1000 persons).

Global Optical Fiber Exports

For the ninth year in a row, the global market recorded growth in overseas shipments of optical fiber cables, which increased by 6.7% to 596K tonnes in 2020. In value terms, optical fiber cables exports contracted to $6.8B (IndexBox estimates) in 2020.

China dominates optical fiber cable export structure, resulting in 344K tonnes, which was near 58% of total exports in 2020. Mexico (46K tonnes) ranks second in terms of total exports with a 7.7% share, followed by the U.S. (6.7%). The following exporters – Poland (13K tonnes), Spain (12K tonnes), South Korea (12K tonnes), Germany (12K tonnes) and Romania (11K tonnes) – each amounted to a 10% share of total exports.

In value terms, the largest optical fiber cables supplying countries worldwide were China ($2B), the U.S. ($1B) and Mexico ($702M), with a combined 55% share of global exports. These countries were followed by Poland, Germany, South Korea, Romania and Spain, which together accounted for a further 14%.

In 2020, the average optical fiber cables export price amounted to $11,350 per tonne, which is down by -16.8% against the previous year. From 2012 to 2020, the most notable rate of growth in terms of prices was attained by the UK, while the other global leaders experienced mixed trends in the import price figures.

Source: IndexBox Platform