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World Optical Fiber Demand Poised for Continued Growth

World Optical Fiber Demand Poised for Continued Growth

Demand for fiber is expected to steadily grow over the next six years, with world optical cable consumption expected to grow by 3.9% when compared to a drop in 2023.

On this week’s Fiber for Breakfast episode, CRU Group Principal Analyst and Head of Wire & Cable Chenfei Wang noted, “Last year, [North American] demand was down by 12%. That’s partially driven by the inventory situation, but it’s also the fact given some uncertainty in the market, by some hesitation of investment by some of the players.”

CRU Group predicts healthy fiber growth in North America, as well as new infrastructure projects in the Middle East, India, and China. Fiber pricing worldwide has dropped almost 36% over the last 12 months, driven by China lowering its prices and the rest of the world being influenced by that action.

U.S. fiber pricing is unaffected by international spot market ups and downs, said Wang, because “more than 95%” of fiber purchases are done on a long-term contract basis and that Buy America requirements for fiber make the North American market more insulated against fluctuations.

“If you’re looking at mid-term growth for the U.S., we’re very positive,” said Wang. “We’re looking at growth by 12.6% CAGR in 2024 through 2029.”

Fiber demand driven by BEAD funding is expected to be predicated upon when the top 15 states who will receive the most funding start allocating funds, with most states expected to start doing so by the second half of this year with the most impact occurring in 2025 and demand peaking in 2026.  However, as BEAD diminishes, private network investment is expected to continue to grow.

“We think demand will peak by 2030,” Wang stated. “By that time, demand won’t be driven by BEAD. We also expect the market will not solely be driven by fixed broadband access. We still think 5G is ongoing. We see the 5G deployments stretch longer and we do see 5G impacts on fiber demand grow in the mid-term.”

To learn more about the growth in optical fiber demand in the years to come, listen to the latest Fiber for Breakfast.