Fiber Optic Cable

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This study analyzes US supply of and demand for fiber optic cable products. Major product types covered are:

  • single mode
  • multimode

Excluded from the scope of the study are bare wire and other types of noninsulated wire products, as well as complete wiring harnesses and wiring sets (although separately sold wire utilized in such products is included).

Historical and forecast sales are also provided for major end use markets, including:

  • telecommunications, including backbone and last-mile applications
  • construction and other markets (e.g., motor vehicles, aerospace)

Historical data (2010, 2015, and 2020) and forecasts for 2025 and 2030 are provided in millions of dollars for demand, shipments, and net exports.

Impact of COVID-19 Pandemic on Fiber Optic Cable

Demand for fiber optic cable was flat in 2020, although the impact of the COVID-19 pandemic contributed significant volatility during the year. Many suppliers reported poor sales performance in the second and third quarters, followed by rebounds in the fourth quarter. Performance also varied considerably by application.

In particular, market performance was sustained by rising investment in infrastructure to support 5G technology, as the large-scale rollout of 5G began in mid-2019. This process proceeded throughout 2020, as the pandemic did not significantly alter timelines for the introduction of 5G services by telecommunications providers. However, the economic uncertainty during the pandemic did limit capital spending by telecommunications firms to an extent.

The widespread shift toward remote work also altered data traffic patterns, with traffic in networks in residential areas jumping substantially.

However, investment in telecommunications networks to support offices and other commercial buildings was negatively impacted by both remote working trends and economic uncertainty.

Market performance for fiber optic cable is expected to pick up in 2021 as a stronger economic environment allows for greater capital outlays in telecommunications infrastructure. The ongoing rollout of 5G will also continue to support demand throughout the near future.

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Supply & Demand

Fiber optic cable demand is projected to advance 3.0% per year to $3.6 billion in 2025. Growth will moderate in comparison to that seen between 2010 and 2020, as the market for fiber optic cable in telecommunications backbone applications has matured. However, investment in infrastructure for 5G (5th Generation) mobile communication networks will support sustained high levels of demand as this process stretches over the next decade. Healthy gains in demand are also expected for fiber optic cable in last-mile, in-building, and information processing applications.

Average prices for fiber optic cable are expected to decline slightly through 2025, and the cost differential between fiber and coaxial cable will continue to shrink. This factor will support the trend toward last-mile fiber, although fiber optic cable will remain a small portion of demand in this application in the near term.

Shipments of fiber optic cable are forecast to rise 3.0% per year to $3.4 billion in 2025. Growth will be spurred by rising local demand and increased exports to Canada and Mexico, the leading external destinations for US suppliers.

The US has historically been a net exporter of fiber optic cable, but that has shifted in recent years, with the country posting trade deficits in both 2018 and 2020. It is expected that the US will remain a net importer of these products going forward:

  • Growth in the trade deficit is expected to be driven by rising imports from Mexico, which accounts for over half of US fiber optic cable imports.
  • China also historically represented a large and growing share of US imports until the Trump administration imposed a 25% tariff on fiber optic equipment in 2019:
    • It is unlikely that Chinese fiber optic cables will increase their market share through 2025, as the EU accused China of flooding the market with unfairly low priced glass fibers in 2020.
    • The combination of these tariffs makes it unlikely that suppliers will source a growing share of demand requirements from Chinese suppliers.

Demand by Type

Fiber optic cable demand is projected to advance 3.0% per year to $3.6 billion in 2025. Single-mode products will remain the bulk of demand, accounting for 73% of sales.

Fiber optic cable has many advantages over the conventional copper-based coaxial and unshielded twisted pair wires that it competes with, and this will support market growth. These advantages include:

  • higher bandwidth capabilities
  • longer transmission distances
  • immunity to EMI and RFI
  • higher reliability and security
  • lower maintenance costs

In addition, as communication systems improve, fiber optic cable can often be easily converted to newer, higher capacities by changing network and line terminals that house the laser transmitters, rather than by relaying cables.

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Competitive Products

Fiber optic cable primarily competes with copper-based coaxial cable and multiconductor cable, with these three products together accounting for 73% of telecommunications market wire and cable demand in 2020. Between 2010 and 2020, fiber optic cable made significant market share gains at the expense of copper-based products, rising from 30% of the telecommunications market in 2010 to 51% in 2020.

Fiber optic cable dominates competing products in terms of data transmission capabilities and has significantly less signal loss over distance. As a result, fiber optics have largely replaced copper products in the telecommunications backbone. Lower costs represent the primary remaining advantage allowing coaxial and multiconductor cable to continue to find use. Typical telecommunications infrastructure uses both fiber and copper-based cable, with copper representing the bulk of the last-mile network. Copper-based products are also used as part of local area networks in commercial buildings.

Going forward, fiber optic cable is expected to continue gaining market share, with both coaxial and multiconductor cable underperforming:

  • As more devices are connected to the internet and telecommunications data use continues to rise, the performance advantages of fiber optic cable will justify the additional cost in a greater range of applications. In particular, last-mile fiber holds potential for rapid growth.
  • However, because the substitution of copper with fiber in the telecommunications backbone has mostly been completed, the difference in market performance between fiber and competing products is not expected to be as large from 2020 to 2025 as it was in the 2010-2020 period.
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