Optical Fiber Sector Surges! State Power Investment Group Increases Investment by 200 Billion, New Infrastructure Prosperity Continues to Heat Up

On March 24, A-shares in the optical fiber sector rose, with constituent stock Tongguang Cable (300265.SZ) up 13.12%. Xineng Taishan (000720.SZ), Fojing Technology (002222.SZ), Yunnan Geology (002428.SZ), Longfei Optical Fiber (601869.SH), Optoelectronics Co. (600184.SH), and Tongding Interconnection (002491.SZ) hit the daily limit-up.

In terms of news, on March 23, the State Power Investment Corporation held its first press conference for 2026. The company plans to invest 200 billion yuan this year, a 17% increase year-over-year. In the first quarter alone, it aims to complete 23 billion yuan in investments, a 35% increase compared to last year.

Clean Energy as the Main Investment Focus

As one of the five major power generation groups, State Power Investment’s annual investment plan is seen as a “weather vane” for the energy industry’s development. The confirmed 200 billion yuan investment marks a new high in the company’s annual investment history and provides clear growth expectations for upstream and downstream industries.

According to the press conference, State Power Investment will coordinate cross-cycle and counter-cyclical adjustment measures, emphasize effective investment, and leverage the leading role of key energy state-owned enterprises. By the end of 2025, the company’s total assets will exceed 2 trillion yuan, with total installed power capacity surpassing 230 million kilowatts. The share of clean energy will exceed 65%. Increasing investment is driven not only by the company’s growth needs but also by national efforts to expand effective investment, promote energy structure transformation, and strengthen new infrastructure.

Although the company did not specify the exact allocation of the 200 billion yuan, its strategic layout and industry trends reveal clear investment priorities, which are also a core reason behind today’s surge in the fiber optic sector. Notably, over 80% of this investment will go into clean energy, focusing on new power system construction, including renewable energy base development, smart grid upgrades, energy storage technology applications, and ultra-high voltage supporting projects. These aim to enhance grid capacity for wind and solar power, promoting an energy transition from traditional thermal power to an integrated “wind-solar-storage-transmission” model.

Growing Demand for Optical Fiber and Cables

Fiber optic cables are essential for smart grid and renewable energy base construction, serving as the “blood vessels” for power transmission and data communication. Their demand aligns closely with State Power Investment’s investment plans.

During smart grid upgrades, whether building ultra-high voltage backbone networks or digitizing urban and rural distribution networks, large quantities of high-quality fiber optic products are needed for signal transmission, equipment monitoring, and dispatch management. The scale of renewable energy projects, especially large wind and solar farms in deserts and Gobi regions, as well as the “West-to-East Power Transmission” and “North-to-South Power Supply” strategies, demand higher interference resistance and transmission efficiency from fiber optics, directly boosting market demand.

Since 2025, the fiber optic industry has gradually moved out of oversupply, entering a new stage characterized by high-end demand and balanced supply and demand. According to CRU reports, global fiber optic cable demand will grow by 4.1% year-over-year in 2025, with data center fiber demand increasing by 75.9%. In 2026, global demand is expected to reach 577 million core kilometers, a 5% increase, with North America’s demand up 17% and Asia-Pacific (excluding China) up 6.6%.

The sustained demand recovery is partly driven by rapid AI industry development, with high-density fiber usage in AI data centers surging, causing “supply-demand-driven price increases.” Data from Xunshi Optical Communications shows that by February 2026, the price of G.652.D bare fiber had exceeded 30 yuan per core kilometer, with cumulative increases of 94%–144%. Additionally, the “14th Five-Year Plan” emphasizes “moderately advanced construction of new infrastructure” and “strengthening computing power, algorithms, and data supply,” while the national industrial and information technology meetings have highlighted launching “broadband upgrades” and pilot projects for 10-gigabit optical networks, with continued policy support.

On the supply side, industry reshuffling over recent years has led to the exit of some small and medium capacities, increasing market concentration. Currently, about 25 companies can reliably secure orders from operators, with roughly 60% of market share held by four leading firms, promoting more rational capacity deployment among top players.

Beneficial Companies

The 200 billion yuan investment by State Power Investment will undoubtedly boost the fiber optic industry’s growth. From the supply chain perspective, increased investment in smart grids and renewable energy bases will directly drive demand for fiber optic cables, optical modules, and related products. Upstream companies producing fiber preforms and materials, midstream fiber optic cable manufacturers, and downstream communication equipment integrators will all benefit.

For example, Longfei Optical Fiber, a core supplier of power communication fiber and cables, has its G.654.E ultra-low attenuation fiber widely used in ultra-high voltage projects, holding a 10% market share in specialized power cables (ADSS/OPGW). This investment will significantly increase orders for ultra-high voltage supporting communication cables, especially high-value products like G.654.E, further boosting performance.

State Power Investment’s focus on new power system construction—particularly ultra-high voltage, wind, solar, storage, and digital power—relies heavily on optical communication chips and devices, which are core areas for SJ Lightwave. As a leading global PLC splitter chip manufacturer (with a 32% market share), SJ Lightwave’s integrated IDM process covering chip design, wafer manufacturing, and packaging/testing allows it to precisely meet the communication needs of State Power Investment projects, directly increasing core product orders and promoting large-scale application in the power sector.

Additionally, Zhongtian Technology has long-term strategic agreements exceeding 10 years with key clients like State Grid and the five major power groups. The recent 200 billion yuan investment by State Power Investment will activate demand across power, communications, marine, and renewable sectors. Coupled with the company’s existing order reserves worth hundreds of millions of yuan, this will further solidify its growth foundation, supporting both existing orders and new demand.

(Edited by: Wang Zhiqiang HF013)

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