In recent years, Chinese optical fiber manufacturers can be described as boundless. Since the launch of 3G in 2009, Chinese optical fiber manufacturers have swept away from the downturn since the bursting of the optical communications bubble in 2000, and have grown rapidly. They have also defeated foreign fiber optic giants in market competition and occupied more than 70% of the domestic optical fiber market. As China has become the world's leading optical fiber market, Chinese optical fiber manufacturers have also jumped to the top. Relevant data shows that among the top ten optical fiber manufacturers in the world, Chinese manufacturers account for half of the country.
Under the calm sea, there is a raging undercurrent. In the prosperous market and manufacturers desperately expanding production, some experts continue to shout "Wolves are coming", warning the fiber industry is about to face a situation of severe overcapacity and fierce price competition. In the first half of this year, Chinese optical fiber manufacturers generally experienced a decline in revenue, profits, or slower-than-expected growth. Among them, the typical representative is the northern fiber optic manufacturer Xinmao Technology. With the large-scale expansion of production, Xinmao Technology ’s 2012 optical fiber and cable revenue increased by 19%, of which optical fiber revenue increased by 36% and net profit increased by 165%; but in the first half of 2013, the optical communication business dropped by 31% year-on-year, gross profit margin It fell to only 8.75%, and even suffered losses in the third quarter. The fantasy start has become a heavy reality, is the wolf really coming, or is it because "the pace is too fast, it's pulling the egg"?
No longer an emerging market
CRU, an authoritative market research organization that has been singing praises for the Chinese optical fiber market, has recently issued an early warning. CRU said that through the research of the agency, due to the delay in the construction of major telecommunications infrastructure, the growth of China ’s optical fiber market in the third quarter of this year was lower than expected, and the growth mainly occurred in emerging markets such as Latin America and Africa. The growth rate in the first three quarters reached 13% .
As a typical representative of emerging markets in the past few years, with the rapid development in recent years, the Chinese market has quietly grown into a behemoth, removing the "emerging" hat. According to CRU statistics, global fiber shipments in 2012 were 251 million core kilometers, of which the Chinese market accounted for 49%, close to half of the world. According to Mao Qian, director of the Optical Communication Committee of the China Communications Society, China has laid more than 600 million core kilometers of optical fiber, of which only 116 million core kilometers were used in 2012, making it the world's largest optical fiber production and sales country.
However, at the China Telecom Optoelectronic Cable Industry Summit held this month, some experts pointed out that China's optical fiber industry is facing three tests: overcapacity, core technology and raw material supply constraints, and insufficient development of new products. The data shows that this year China's optical fiber production capacity will be 50% excess, resulting in continued price declines and a significant reduction in corporate profit margins. As the CRU sounds the alarm, Chinese optical fiber manufacturers may face difficulties in the short term.
In fact, Corning, the global leader in fiber optics, has disclosed in the third quarter earnings report. The financial report said that the decline in sales of optical fiber was significant, and mainly occurred in North America and China. According to C114 statistics, the production capacity of Chinese optical fiber manufacturers reached 180 million core kilometers in 2013, far exceeding market demand. Where is the blue ocean market that digests remaining capacity?
The global market is not yet familiar
There is no doubt that 4G is the first blue ocean market. In China, the temptation of 4G has enabled fiber optic manufacturers with declining revenues to quench their thirst in 2013. The construction of 4G base stations, the connection between radio frequency and base stations, and the interconnection between base stations have generated a lot of demand for optical fibers, and the access frequency band used by 4G is higher than that of 2G and 3G. With more base stations, the demand for optical fiber is not much less than that of 3G construction.
4G is about to be licensed, and China will usher in the climax of 4G construction in 2014. The construction of the first batch of 207,000 4G base stations by China Mobile will bring a lot of business opportunities to the optical fiber industry. Recently, it even broke out. China Telecom ’s first 4G base station bidding has also Reaching nearly 170,000, coupled with the unknown that China Unicom will not be too low, the expectations of 4G construction for fiber demand in the next few years have become the source of power for fiber manufacturers to expand their production capacity.
In addition to preparing for 4G, optical fiber manufacturers have also launched optical fiber and cable solutions for a variety of industry applications, such as optical fiber perimeter security, optical fiber sensing, data center applications, etc., in the 2013 China Optical Expo Hengtong Optoelectronics, YOFC and other manufacturers' booths In the past, C114 has noticed this trend. In addition, optical fiber manufacturers have also vigorously developed core technologies. The output of optical fiber preforms from many manufacturers has increased significantly this year, and they can even achieve initial self-sufficiency. For example, Hengtong Optoelectronics and Fiberhome Technology, many manufacturers have also turned their investment focus to optical fiber preforms. For example, Zhongli Technology, Kaile Technology, etc.
The domestic market still has potential to tap, while the international market is a larger blue ocean. The growing Latin America, Africa, and emerging markets such as Russia, India, and Southeast Asia will all be potential markets worth expanding for Chinese fiber manufacturers. At present, the timing and conditions for Chinese optical fiber manufacturers to go out are ripe. In fact, leading manufacturers such as Hengtong Optoelectronics and FiberHome have already begun to go out. Exploiting the international market is the only way to digest China's excess fiber and cable production capacity, and also the only way for Chinese fiber manufacturers to grow from large to strong. After more than ten years of hard work in the domestic market and victory, Chinese optical fiber manufacturers began to enter the international arena and will start a new round of competition with international competitors.
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