Page 41 - Market Analysis Report of Optical Communications Field in China & Global market 2019

By the end of 2018, the construction of China’s Figure 6: Development of total length of optical cable line
optical broadband access network and 4G mobile
communication base station has been basically
completed, while the 5G construction has not been
started on a large scale. In the absence of large-scale
expansion demand for new networks, the growth
rate of optical cable demand has slowed down, and
the three major operators have adjusted and reduced
the capital expenditure budget for fixed network
construction, resulting in a cliff-like decline in the
optical fiber and optical cable industry in the first
half of 2019. At the same time, the competition
is intensified, the price of optical fiber and cable
products is reduced to about 30 yuan. It is expected
that the price of optical fiber and cable will continue to Therefore, although China’s optical fiber and cable market
decrease to about 20 yuan in 2020. is significantly affected by changes in market supply and
demand, it still faces great pressure in the short term. But
Scale Commercial of 5G will Bring a New Round of in the future, with the launch of 5G large-scale network
Growth to the Industry construction and data center, the industry outlook is quite
In June 2019, the Ministry of Industry and Information bright and with plenty of opportunities.
Technology issued 5G licenses to China Mobile, China
Telecom, China Unicom and China Broadcasting and Current Situation of China’s Optical Fiber Preform
Television, marking China’s official entry into the 5G era. Industry
High-speed and low-delay features of 5G put forward Due to the high technical threshold of preform and the
higher requirements for fiber capacity and connection difficulty of capacity expansion in a short time, there was
density. A large number of new optical fibers will be needed a serious shortage of preform in the market, which led to
for the construction of 5G carrier network’s forward and the increase of the unit price of preform, optical fiber and
middle transmission parts and 5G base station’s dense optical cable products in the whole industrial chain.
networking. The 5G capital expenditure plan of the three
major telecom operators will also be adjusted accordingly The production capacity of China’s optical fiber preform
with the change of network construction from “Scale test”, industry has increased from less than 100 tons in the 1990s
“Scale trial commercial” to “Comprehensive commercial”, to more than 10000 tons by the end of 2018.The industrial
and the pace of network construction will be moderately
advanced. It is expected that China’s 5G forward network upgrading is realized from cable, to fiber and preform,
will bring about an accumulated demand of 245 million and the dependence on import of optical fiber preforms is
fiber kilometers for optical fiber and optical cable, which shrinking year over year. It is expected that China will be
have partially released in 2019. At the same time, the fully self-sufficient after 2022. By 2023, the supply and
market demand for optical fiber and cable in China is demand of China’s optical fiber preform are expected to
expected to reach 230 million fiber kilometers, 225 million reach 20200 tons and 19400 tons respectively. At present,
fiber kilometers, 260 million fiber kilometers and 300 the leading enterprises of domestic preform manufacturers
million fiber kilometers respectively in 2019 and 2022. are YOFC, Hengtong, ZTT, Futong and FiberHome
In 2022,China is expected to actually start 5G large-scale Communication, whose productions are all in the forefront.
network construction and simulate the demand of optical
fiber and cable. In the first half of 2019, the total demand fell sharply, while
the capacity of preform prepared for 5G increment has been
In terms of optical cables, the length of optical cable lines released, thus the shortage of preform was alleviated. On
has maintained double-digit growthin China. According the other hand, this causes overcapacity in optical fiber and
to the economic operation of the communication industry optical cable industry. However, due to the promotion of
announced by the Ministry of industry and information 5G commercial, this situation will be improved with the
technology in 1H 2019, 1.87 million kilometers of new large-scale construction of 5G. At the same time, driven by
optical cable lines were built in China, contributing to the construction of data center, the demand for multimode
a total length of 45.46 million kilometers. This length optical fiber products grows steadily; driven by national
increases 13% year on year, maintaining a rapid growth defense and military informatization, and smart grid,
trend. The proportion of access network optical cable, local the market demand for special optical fiber products is
network trunk optical cable and long-distance optical cable prosperous.
is 63%, 34.5% and 2.5%, respectively.

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