On October 19, 2026, Taiwanese market research firm TrendForce announced a forecast that global optical fiber supply will fall short by 180 million fiber-kilometers in 2026, and that the supply-demand tightness will continue through at least 2028. Demand is being pushed up by the construction of AI data centers and the buildout of high-capacity networks linking them, and for some products the average 2026 price is expected to exceed five times the previous year's level. Telecom carriers are increasingly locking in future supply through long-term contracts, but it takes time for manufacturers to bring new production facilities online. Taking into account the capacity expansion plan Furukawa Electric announced in August, there is a wide gap between when customers secure their supply and when supply capacity actually increases.
Optical Fiber Prices Surge by Up to More Than 5x, With Increases Varying by Application
According to TrendForce's published market forecast, global optical fiber demand in 2026 is expected to reach 577 million fiber-kilometers. A "fiber-kilometer" is a unit that totals the length of each individual fiber. For example, laying a 100-fiber cable over 1 km equals 100 fiber-kilometers. Unlike the distance of a cable route, it also reflects the number of fibers housed inside the cable. TrendForce's projected shortfall of 180 million fiber-kilometers is likewise expressed in this unit and refers to the global supply-demand gap.
The tight supply-demand balance is forecast to cause spot prices for finished optical fiber to rise sharply. Demand from AI data centers is a particular driver, but the size of the increase varies by product type. TrendForce's 2026 outlook relative to 2025 price levels is as follows:
| Optical fiber application/type | 2026 price outlook (vs. 2025) |
|---|---|
| Bend-resistant fiber for wiring inside data centers | More than 5x on annual average |
| Fiber for data center interconnects and high-capacity backbone networks | About 2.8x |
| Fiber for mainstream telecom services | About 3.7x |
The largest price increase is expected for bend-insensitive fiber (BIF), which is used for wiring inside data centers. In high-density data center cabling, products that keep signal loss low even when bent in tight spaces are in demand. The average 2026 price of such products is forecast to exceed five times the 2025 level. Fiber used for data center interconnects and high-capacity backbone networks is expected to rise about 2.8 times, and products for general telecom services about 3.7 times.
In other words, the price surge is not limited to specialized products for AI data centers but extends to fiber used in general telecom infrastructure. However, these are price outlooks for finished fiber on the spot market, not prices under the long-term supply contracts carriers sign with manufacturers. TrendForce has not disclosed absolute prices or contract unit prices, and the forecast does not suggest that fees for home internet service will rise by the same multiples.
Factory Utilization Rises to 92%, and Expansion Takes 18–24 Months
While demand is surging, the supply side has almost no spare capacity to ramp up output quickly. According to TrendForce, global optical fiber production utilization is expected to reach 92% in 2026, and inventory levels have fallen from four months' worth in 2024 to just one month. Some major manufacturers are reportedly already booked through the first quarter of 2027. With existing facilities running at high utilization and inventories declining, there is little room to handle additional orders.
The obstacle to expansion is the production capacity for "preforms," the raw material for optical fiber. A preform is a glass structure that has been formed in advance to determine the fiber's optical properties; it is heated and drawn out thin to make optical fiber. According to TrendForce, expanding preform capacity requires installing glass deposition equipment and setting up production processes, which typically takes 18 to 24 months. As a result, even if manufacturers decide to invest in equipment in response to rising prices, it is difficult to increase supply significantly in a short time.
That said, the 18–24 month figure is a guideline for expanding preform capacity, not a construction period common to every plant that makes optical fiber or cable. Manufacturing the fiber and bundling multiple fibers into cable also require different equipment. Even if cable production capacity is increased, finished output cannot grow unless the supply of fiber and preforms, the materials for it, keeps pace. Resolving the tightness requires securing capacity at every stage of the supply chain.
As these supply constraints continue, the presence of data center demand is expected to grow further. TrendForce forecasts that data center-related applications' share of global optical fiber demand will rise from 18–20% in 2026 to 30–35% in 2027. This is because, beyond large cloud service providers expanding AI data centers, semiconductor makers and telecom carriers are also investing in related infrastructure, increasing demand for the fiber needed for data center interconnects and high-capacity backbone networks.
However, a change in share of total demand needs to be distinguished from the growth rate of demand itself. Since TrendForce's announcement does not give total global demand for 2027, this ratio alone cannot be used to calculate how many times data center demand will multiply. Even so, the picture is clear: capacity expansion takes time, while AI-related applications rapidly increase their share of overall demand.
Verizon and Meta Secure Supply Through Long-Term Contracts; Furukawa Electric Invests About ¥100 Billion
With the supply shortage expected to persist, telecom carriers and major technology companies are increasingly securing the optical fiber they will need through long-term contracts. In September 2026, U.S. telecom giant Verizon and optical fiber manufacturer Corning signed a multi-year supply agreement covering 2027 to 2032. According to Corning's September 8 announcement, the agreement covers high-density optical fiber and connectivity products, with a total fiber length of more than 80 million miles (about 129 million fiber-kilometers). It is a contract to secure materials needed for network buildouts over the next several years well ahead of actual delivery.
The contract does not target only the long-distance networks linking AI data centers. Verizon plans to expand its residential and business broadband networks while also building out high-capacity backbone networks connecting AI data centers. The idea is to support both with common telecom infrastructure, so it would not be appropriate to treat all of the contracted fiber as AI-specific demand. Nor can the multi-year contract volume for 2027–2032 be directly compared with TrendForce's forecast of the single-year global supply shortfall for 2026.
Backed by long-term contracts with major customers, moves to expand production capacity are also under way. Corning and Meta broke ground on March 31, 2026, on an expansion of optical cable manufacturing facilities in Hickory, North Carolina. According to the two companies' announcement, this is part of a multi-year agreement of up to $6 billion announced in January of the same year, with Meta as the anchor customer for the new facility. The plan is to increase U.S. production of optical cable for AI data centers, but the groundbreaking announcement did not give a specific completion date or output increase.
Japan's Furukawa Electric has also decided on a large-scale capital investment to respond to rising global demand for optical fiber and optical fiber cable. In a disclosure dated August 4, 2026, the company announced it will invest a total of about ¥100 billion to expand production capacity for optical fiber and rollable ribbon cable in four countries: the United States, Brazil, Japan, and India. Rollable ribbon cable can house many optical fibers at high density and is used in high-capacity optical communications such as data centers. The new facilities are scheduled to begin mass production in phases from the second half of fiscal 2028, so it will still take time for the investment to be reflected in actual supply.
The progress of supply contracts and capital investments announced by each company can be summarized as follows:
| Company / announcement date | Announcement | Planned supply/production timing |
|---|---|---|
| Verizon/Corning (September 2026) | Multi-year supply agreement for high-density optical fiber and connectivity products | 2027–2032 |
| Corning/Meta (March 31, 2026) | Groundbreaking on expansion of optical cable manufacturing capacity in Hickory, U.S. | Completion date and output increase not disclosed |
| Furukawa Electric (August 4, 2026) | Investing about ¥100 billion to increase production of optical fiber and rollable ribbon cable | Phased mass production from second half of fiscal 2028 |
Under the Verizon–Corning contract, product supply begins in 2027, while Furukawa Electric's new facilities will not start mass production until the second half of fiscal 2028 or later. Although each company's products and investment targets differ, there is clearly a time lag between customers securing future procurement and manufacturers increasing supply capacity. Even if future supply is secured through long-term contracts, that does not immediately increase the supply capacity of the market as a whole.
Note that the "roughly doubling" Furukawa Electric says its investment will achieve refers to its manufacturing capacity for rollable ribbon cable, measured in fiber count. The baseline is the end of fiscal 2025, and it does not mean the company's overall optical fiber supply capacity or global preform production capacity will double. Investment in the Indian joint venture Birla Furukawa Fibre Optics (BFFO) is also conditional on reaching an agreement with co-investor Universal Cables.
Furukawa Electric also revealed that in deciding on the investment it confirmed purchase commitments from customers, including long-term contracts. Indications of future purchase intent make it easier for manufacturers to decide on investing in expansion facilities. In other words, long-term supply contracts are both a means for customers to secure materials and a factor encouraging manufacturers to expand capacity. However, the company's disclosure does not confirm whether customers are making advance payments or the terms of individual contracts.
Will the Shortage Ease After 2028? Mass Production Start and Supply Recovery Are Separate Matters
TrendForce analyzes the current optical fiber shortage as differing from past telecom infrastructure investment cycles, arising instead from sustained demand growth tied to AI data centers. Because bringing new production capacity online takes time while demand is forecast to keep growing, it expects the supply shortage to continue through at least 2028. In this situation, moves by telecom carriers and companies with large-scale infrastructure to secure future supply through long-term contracts are likely to spread further.
However, TrendForce's forecast of a shortage "through at least 2028" and Furukawa Electric's planned "start of mass production in the second half of fiscal 2028" differ in the markets and time frames they cover. Even if Furukawa Electric's expansion proceeds as planned, that alone does not necessarily resolve the global shortage. Moreover, because optical fiber and cable require different specifications depending on the application, whether customers can secure enough of the products they need is a separate question from whether supply capacity grows.
To judge whether supply and demand will improve, it will be necessary to watch not only manufacturers' announced investment amounts and capacity expansion plans but also actual mass-production start dates, product-by-product delivery status, inventory levels, and order backlogs. Procurement pressure in the short-term market is likely to ease only once supply from new facilities begins, leads to deliveries to customers, and translates into recovering inventories. As demand for optical fiber from the expansion of AI infrastructure continues, how far the time lag between securing supply by contract and actually expanding production capacity can be narrowed will shape the market going forward.