AI data centers are driving a massive surge in demand for optical fiber, requiring 36 times more fiber than traditional CPU server racks, according to Rahul Puri, CEO of STL's Optical Networking Business. This has led to a severe glass shortage, pushing lead times for fiber cables to 20 weeks for large buyers and up to a year for smaller purchasers.
Fiber prices surge 70% since 2021
Global fiber prices have risen roughly 70% from a 2021 trough of $3.70 to approximately $6.30 per fiber-kilometer. Data center fiber demand grew about 76% year-on-year in 2025 and is projected to account for 30% of total global fiber demand by 2027, up from below 5% in 2024. Manufacturers have shifted production from standard G.652D fiber used in telecom networks to higher-margin G.657A fiber suited to AI data centers and drone applications.
Major Chinese optical fiber manufacturers Hengtong and FiberHome have booked orders stretching into early 2027. Corning signed a $6 billion supply agreement with Meta and two similar deals with unnamed hyperscalers. Nvidia invested $300 million in Corning to build three new US fiber plants, though new capacity from those projects is not expected to come online until 2027 or later.
The fiber shortage reflects the broader impact of AI infrastructure buildout on the supply chain. While large hyperscalers secure supply through long-term deals, smaller purchasers face extended lead times of up to a year. The exact timeline for when supply will catch up with demand remains unclear.
Discussion
0 comments
Log in to join the thread with a thoughtful take, question, or correction.