UBS: The wave of fiber optic price increases has spread globally

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Global optical fiber prices are experiencing a new round of sharp increases, with the upward trend spreading from the Chinese market to Europe and the US. Surging data center demand and tightened upstream preform supply jointly drive this round of price cycle, significantly improving the profit outlook for industry leader YOFC.

According to Wind Trader, UBS’s latest research report cites new data from industry research institution CRU: the spot price of China’s G652.D bare fiber reached 83.40 yuan per fiber kilometer (about $12.07) in March 2026, a 165% jump from January 2026, and an astonishing 418% year-on-year increase. Since May 2025, this price has cumulatively risen by over 400%, and has for the first time surpassed the previous cycle high of 78.80 yuan per fiber kilometer. At the same time, prices for similar products in the European market rose 136% from January, making the tightening supply trend increasingly evident globally.

UBS analysts Jasmine Huang and Sara Wang believe that YOFC’s profitability has entered an upward revision cycle, and they have substantially raised the company’s profit forecasts for 2026 to 2028, estimating earnings per share in 2026 at 4.98 yuan, far exceeding the market consensus of 1.85 yuan per share.

Chinese optical fiber prices hit record highs, rising faster than the previous cycle

According to CRU's bimonthly data, the spot price of China G652.D bare fiber registered at 83.40 yuan per fiber kilometer in March 2026, marking a 418% year-on-year rise and a 165% increase from January 2026, further accelerating from the 92% YoY and 79% MoM rise reported in January 2026.

This price marks that since May 2025, China’s G652.D bare fiber prices have cumulatively increased by over 400%, surpassing the previous cycle high of 78.80 yuan per fiber kilometer for the first time and setting a historical high.

It is noteworthy that since January 2026, China’s G652.D bare fiber price has surpassed that of similar products in Europe. According to UBS, the last time this occurred was in November 2018, when China’s large-scale FTTH deployment and 4G network construction jointly drove explosive growth in fiber optic cable consumption.

Price surge spreading to Europe and US, G657.A1 fiber strengthens in tandem

The rise in optical fiber prices is no longer limited to China. CRU data shows that European G652.D bare fiber prices reached 7.94 euros per fiber kilometer (about $9.1) in March 2026, up 136% from January 2026 and up 159% year-on-year, with tightening supply now spreading globally.

Prices for G657.A1 bare fiber, used for indoor and bend-insensitive applications, have also surged sharply.

CRU data shows that the prices of G657.A1 bare fiber in Europe and the US jumped 130% and 69% month-on-month compared to January 2026, mainly supported by strong data communications demand and tightening supply.

Demand structure diverges: Data centers replacing telecom operators

On the demand side, China and overseas markets present different structural characteristics.

CRU data shows that in Q1 2026, China’s optical cable consumption remained flat year-on-year, with telecom operator demand still weak, but growth in data center demand offset this drag. Fiber manufacturers are reallocating capacity to new application fields such as data centers and fiber-optic drones, upstream preform supply remains tight, and the industry as a whole is being restrained in terms of capacity expansion.

For overseas markets, YOFC’s core overseas markets (Europe, Southeast Asia, Latin America) saw a 2% year-on-year demand increase in Q1 2026, continuing the 2% annual growth seen throughout 2025, in line with UBS’s previously positive outlook for overseas demand recovery. The US market stood out in particular, with a 24% year-on-year and 29% quarter-on-quarter demand increase in Q1 2026—driven by both telecom network construction and hyperscale data center expansion.

Earnings forecasts revised sharply upward, valuations remain attractive

UBS believes the rapid rise in spot fiber prices matches its channel survey findings, that YOFC’s earnings have entered an upward revision cycle, and that improved price visibility and product structure upgrades will provide continued support.

In terms of earnings forecasts, UBS expects YOFC's revenue to rise from 21.062 billion yuan in 2026 to 33.742 billion in 2030, with net profit rising from 4.122 billion to 8.526 billion yuan. EBIT margin is expected to surge from 11.4% in 2025 to 24.3% in 2026, and expand further to 32.9% by 2027.

Currently, YOFC’s share price corresponds to a projected 2027 PE ratio of about 19x. UBS notes that the core issue investors are focusing on now is the sustainability of the price rebound, and to what extent the increase in spot prices can be transmitted to company profits.

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