1. Change and Opportunity of China Fiber Optic Industry
Opportunities in China Fiber Industry
The high demand from overseas markets will bring opportunities to the Chinese optical fiber
industry in the next few years. Chinese fiber manufacturers have mastered the drawing
process, with the improvement of localization of fiber optic equipment, the cost of to the
construction of optical fiber drawing tower and fiber optic patch cables capacity expansion
will significantly reduce, these are all favorable condition for the development fiber optic
industry.
Challenges in China Fiber Industry
The first challenge of the optical fiber industry in China is overcapacity. Currently there are
several large capacity expansion projects in progress, and soon fiber capacity will far exceed
the fiber needs of the Chinese market. The industry will be faced with a lot of price pressure.
Optical fiber price has fallen significantly after 2000, but because of overcapacity and other
factors, the price pressures still exist. The innovation is a vital key to gain competitive
advantage. But judging from the domestic situation, the innovation is difficult, because it
requires a very high investment, while here are certain difficulties for innovative products to
get customers’ acceptations, the customers are very sensitive to price, because the new
product takes more. After all, the return of the innovative product cycle is usually longer, it is
also the problems supplier must consider and face.
The Development Trend of China's Optical Fiber Market
First, China will increase the production of preforms. The increased competition of Fiber
market and price pressure of fiber optic will encourage fiber optics manufacturer to increase
fiber production. Fiber manufacturers can only continue to lower fiber costs to maintain profit
levels, the most effective method is to reduce the preform costs and increase their production
of preforms. Preform shortages (especially after the major earthquake in Japan) has affected
China fiber optic industry, which contributed to the large Chinese fiber manufacturers to
increase their preform production capacity, to improve the security of supply of preform. The
support of the Chinese capital market is also conducive to preform capacity building project.
Second, China's optical fiber and cable market will be dominated by several large groups can
produce the preform, optical fiber and optical cable at the same time. Affected by the
centralized procurement system, Chinese fiber manufacturers are trying to win more market
share from the cable market competition, thus promoting its fiber-optic sales. The optical fiber
cable manufacturers in China which do not have the capacity are facing difficulties. In such a
competitive situation, China's optical fiber and cable market ultimately will be dominated by a
few large groups. Third, the optical fiber manufacturer in China will play a more important role
in the international market. With the excess capacity of the optical fiber market in China,
Fiber manufacturer is bound to turn to overseas markets to seek more opportunities in the

2. future, and there will be more Chinese manufacturers of optical fiber and setting overseas
subsidiary, in order to increase the competitiveness of the local market.