The global optical fibre market reached a value of about USD 7.2 Billion in 2021. The industry is further expected to grow at a CAGR of about 3.60% in the forecast period of 2022-2027 to reach a value of around USD 9.3 Billion by 2027.
The industry report gives a comprehensive analysis of the key segments such as price trends, drivers, restraints, the competitive landscape, and other essential market aspects. The prices of optical fibre in 2021-22 are expected to be affected by limited production of silica due to stringent dredging regulations and increased demand for Silica in the Semi-Conductor Industry. While the key price indicator in the industry report is the feedstock, the key demand indicator is the highest category spender by region—Asia Pacific.
Optical fibre refers to the technology associated with data transmission that transmits data or information as light pulses along with a plastic or glass fibre. Optical fibres are employed for high-performance and long-distance data networking. It is commonly used in telecommunication services like telephones, the internet, and television. The optical fibre industry report comprises segments based on material types such as glass and plastics, cable types such as single mode and multiple mode and application segments such as IT and Telecommunications, Military and Aerospace, BFSI and others.
The Asia Pacific region is expected to witness robust growth in the forecast period due to the increasing penetration of smartphones and the advent of 4G and 5G technology across the region. Furthermore, increasing investments by developing countries like China and India into optical fibre infrastructure projects is expected to propel regional growth. In 2018, the Southeast Asia-Japan 2 (SJC2) consortium signed an agreement with the NEC Corporation to build a high-performance submarine cable connecting Thailand, Singapore, Mainland China, Hong Kong, Cambodia, Korea, and Japan. This is expected to provide a massive upgrade to fibre connectivity across the region. Furthermore, the optical fibre market growth can be attributed to the rapidly increasing demand for the internet due to the high-quality audio, video, and data transmissions requirements of the growing digitally literate population. Moreover, the advancements in FTTH (Fibre to Home) and 5G technology and the advent of the internet of things (IoT) will increase the employment of optical fibre cables. The market is further aided by the rising expenditure of developed and emerging economies to improve and develop their ICT infrastructure respectively. Global Silica prices are expected to witness an increase, on account of the increasing population and rising construction and automobile production activities. The demand-supply deficit of silica is widened due to the rise in demand for high purity quartz in the semiconductor and solar industry. Silica prices in the Asia-Pacific region are expected to witness an increase due to increased demand and supply constraints because of depletion and environmental restrictions on dredging across the region.
The high cost and complexity associated with the installation of optical fibre are expected to hamper the growth of the market. Moreover, optical fibre procurement is affected by the frequent price fluctuations of silica and the feedstock prices of PMMA (polymethyl methacrylate). In addition, the regional production capacity of major Asia Pacific countries does not fulfil their demand and they rely heavily upon imports. In the US, key manufacturers like the U.S. Silica are increasing their prices up to 15 percent to offset the increased expenditure of transportation, energy, materials, and manufacturing costs that will result in a price hike for optical fibre. Furthermore, the feedstock price increase has resulted in surcharges for optical fibre prices in Europe.
Silica production has been curtailed in major countries due to the implementation of stringent regulations regarding dredging activities. However, increased demand for Silica, particularly in China, Taiwan, Japan and South Korea for semi-conductors, has resulted in supply problems due to lower feedstock production and imports. Plastic optical fibres are generally made from PMMA (polymethyl methacrylate) and its feedstock MMA (methyl methacrylate) is witnessing low downstream demand with surplus production capacity in the Asia Pacific region during Q4 2021, which is putting downward pressure on the prices. Meanwhile, in Europe, the market demand is stable to moderate owing to a 30 per cent drop in the automotive sector demand as a result of the ongoing microchip scarcity. However, despite the ample raw material, the supply is still tight due to high natural gas and electricity expenses. The demand and supply of MMA in the North American market is balanced with improved supply and decreasing prices.
The global optical fibre industry report by Procurement Resource gives an in-depth analysis of the best buying practices followed by the major consumers of optical fibre across the globe, such as engagement models, contract terms, and buyer and supplier negotiation levers, among others.
IT and Telecommunications was the largest application segment due to increased bandwidth demands to accommodate data transfer and communication services in long-range telecommunications over the historical period. The growth of data traffic after the advent of e-commerce and OTT services has necessitated the development of a transmission medium capable of handling high-speed requirements and augmented the growth of the segment.
The Military and Aerospace segment is expected to witness robust growth on a global level on account of increased military expenditure to deploy modern communication and network infrastructure. The prevalence of cyber-attack incidents is likely increasing the necessity of high bandwidth capacity for secure data transferring and protection against signal interference. Furthermore, the rise in next-generation military aircraft orders by countries like India and the UAE in line with the growing global demand is expected to augment the industry growth over the forecast period.
The regional markets for categories/parent industry can be divided into North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.
The fibre optics market’s communication segment, based on application, is the predominant application of the global market. This is primarily because of the increasing number of internet users along with rise in telecom, premises, utility, and industrial sectors are also driving the expansion of the optical fibre market. The biggest end-use industry of fibre optics is telecommunications, since optical fibre cable is the important medium for data transmission from one end to another.
1. Executive Summary
2. Global Optical Fibre Market Snapshot
2.1. Optical Fibre Market Outlook
2.2. Optical Fibre Industry Analysis by Material Type
2.3. Optical Fibre Industry Analysis by Cable Type
2.3.1. Single Mode
2.3.2. Multiple Mode
2.4. Optical Fibre Industry Analysis by Application
2.4.1. IT and Telecommunications
2.4.2. Military and Aerospace
2.5. Regional Overview
2.5.1. North America
2.5.2. Latin America
2.5.4. Asia Pacific
2.5.5. Middle East and Africa
3. Impact of Recent Events
4. Optical Fibre Value Chain Analysis
5. Optical Fibre Production Process
6. Optical Fibre Cost Structure
6.1. Cost saving opportunities
7. Optical Fibre Price Analysis
8. Key Demand Indicator Analysis
9. Key Price Indicator Analysis
10. Trade Analysis
11. Optical Fibre Market Dynamics
11.1. Drivers and Constraints
11.2. Industry Events
11.3. Innovations and Trends
11.4. Porter’s Five Forces
11.4.1. Buyer Power
11.4.2. Supplier Power
11.4.3. Threat of New Entrants
11.4.4. Threat of Substitutes
11.4.5. Industry Rivalry
12. Optical Fibre Feedstock Market Analysis
12.1. Market Overview
12.2. Price Analysis
13. Industry Best Practices
13.1. Sourcing Strategies
13.2. Procurement Model
13.3. Contract Structure
13.4. Negotiation Levers
13.5. Supplier Selection Criteria
13.6. Pricing Model
14. Key Supplier Analysis
14.1. Corning Inc.
14.2. Yangtze Optical FC
14.3. Sumitomo Electric Industries
14.4. Prysmian S.p.A.
14.5. Hengtong Optic-Electric Co., Ltd
14.6. Furukawa Electric Co., Ltd.
In 2021, the global attained a value of around USD 7.2 Billion.
In the forecast period of 2022-2027, the market is projected to grow at a CAGR of 3.60%.
The optical fibre procurement strategies include contract terms, engagement models, negotiation levers, and sourcing strategies.
Long term contracts and negotiation strategies in terms of competitive pricing and sourcing are the current trends being witnessed in optical fibre procurement.
The rapidly growing demand for internet services, advancements in 5G, FTTH and IoT technology and the increased government expenditure to develop ICT infrastructure are expected to drive the optical fibre category growth.
The high cost and complexity of installation of the product and the volatility in feedstock pricing is expected to be a major constraint in the optical fibre category growth over the forecast period.
Corning Inc., Yangtze Optical FC, Sumitomo Electric Industries, Prysmian S.p.A., Shenzhen HTGD Intelligent Equipment Co., Ltd., Furukawa Electric Co., Ltd. are the key suppliers of optical fibre.
There is a demand supply deficit as a result of limited production of Silica due to dredging restrictions and high demand on a global level. The supply of methyl methacrylate (Feedstock of PMMA) is surplus, while the demand from the downstream demand is low.
Key cost components for the category includes raw material, labour, utilities, and transport.
The global optical fibre market reached a value of about USD 7.2 Billion in 2021 and it is further expected to grow at a CAGR of about 3.60%. Optical fibres are employed for high-performance and long-distance data networking. It is commonly used in telecommunication services like telephones, the internet, and television. The Asia Pacific region is expected to witness robust growth in the forecast period due to the increasing penetration of smartphones and the advent of 4G and 5G technology across the region. The optical fibre market growth can be attributed to the rapidly increasing demand for the internet due to the high-quality audio, video, and data transmissions requirements of the growing digitally literate population. Moreover, the advancements in FTTH (Fibre to Home) and 5G technology and the advent of the internet of things (IoT) will increase the employment of optical fibre cables. b. Corning Inc., Yangtze Optical FC, Sumitomo Electric Industries, Prysmian S.p.A., Shenzhen HTGD Intelligent Equipment Co., Ltd., Furukawa Electric Co., Ltd. are the key suppliers of optical fibre.
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