China's optical fiber manufacturers can be described as unlimited in recent years. Since 3G licensing in 2009, Chinese optical fiber manufacturers have rapidly developed and expanded since the optical communication bubble burst in 2000, and have defeated foreign fiber giants in the market competition, accounting for more than 70% of the domestic optical fiber market share. With China becoming the world's leading fiber optic market, Chinese fiber manufacturers have also jumped onto high-rise buildings. According to relevant data, Chinese manufacturers account for half of the world's top ten fiber manufacturers.
Under the calm sea, hidden dark currents are hidden. In the situation where the market is prosperous and manufacturers are desperately expanding production, some experts continue to shout wolf, warning that the optical fiber industry will soon face a serious excess production capacity and fierce price competition. In the first half of this year, China's optical fiber manufacturers generally experienced a decline in revenue and profits, or the growth was less than expected. The typical representative is the northern fiber optics manufacturer Xinmao Technology. With large-scale expansion, Xinmao Technology’s revenue from optical fiber and cable grew by 19% in 2012, including optical fiber revenue growth of 36% and net profit growth of 165%. However, optical telecommunication services decreased by 31% year-on-year in the first half of 2013. It fell to only 8.75%, and even suffered a loss in the third quarter. The dream start turned into a heavy reality. Did the wolf really come, or did it move too fast?
No longer an emerging market
CRU, an authoritative market research organization that has been singing praises for the Chinese fiber market, has suddenly issued an early warning. CRU said that through the study of the agency, due to the delay in the construction of major telecommunications infrastructure, China's optical fiber market grew less than expected in the third quarter of this year. The growth mainly occurred in emerging markets such as Latin America and Africa, with a growth rate of 13% in the first three quarters. .
As a typical representative of emerging markets in the past few years, along with the rapid development in recent years, the Chinese market has quietly grown into a giant, removing the emerging hat. According to the statistics of CRU, the global fiber shipments in 2012 were 251 million core kilometers, of which the Chinese market occupied 49%, nearly 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 115 million core kilometers were used in 2012, making it the world's largest optical fiber production and sales nation.
However, at the China Communications Opto-Electronics Cable Industry Summit held this month, some experts pointed out that China's optical fiber industry faces excess capacity, the supply of core technologies and raw materials is limited by human and new product development efforts. Data show that this year China's optical fiber capacity overcapacity will reach 50%, leading to continued decline in prices, corporate profitability is greatly reduced. As CRU sounds the alarm, Chinese optical fiber manufacturers may face difficulties in the short term.
In fact, the global optical fiber leader Corning has revealed in the third quarter financial report. According to the financial report, the sales volume of optical fiber declined significantly, mainly in North America and China. According to statistics, in 2013, the capacity of China's optical fiber manufacturers reached 180 million core kilometers, far exceeding market demand. Where is the Blue Ocean market for digesting the remaining capacity?
The global market is not yet ripe
There is no doubt that 4G is the first blue ocean market. In China, the temptation of 4G to allow revenue-declining fiber-optic manufacturers to thirst in 2013. The construction of 4G base stations, the connection between radio frequency and base stations, and the interconnection between base stations all generate a great deal of demand for optical fibers. Moreover, the access frequency band used by 4G is higher than that of 2G and 3G, and the coverage radius of base stations is reduced. With more base stations, the demand for optical fiber is more than that of 3G.
4G is about to be licensed. In 2014, China will usher in 4G construction. The construction of China Mobile's first batch of 207,000 4G base stations will bring a lot of business opportunities to the optical fiber industry. Recently, it even exploded. China Telecom’s first 4G base station bidding also It has reached nearly 170,000 yuan, coupled with the unknown that China Unicom will not be too low. In the next few years, 4G construction will have the expectation of demand for optical fiber, which has become the source of the expansion of optical fiber manufacturers.
In addition to preparing for 4G, optical fiber manufacturers have also introduced fiber optic cable solutions for a variety of industries, such as fiber perimeter security, fiber optic sensing, data center applications, etc., at the 2013 China Everbright Expo, Hengtong Optoelectronics, Changfei, and other manufacturers' booths. The reporter has already noticed this trend. In addition, optical fiber manufacturers are also vigorously developing core technologies. This year, the output of optical fiber preforms from many manufacturers has increased dramatically, and even initial self-sufficiency has been realized. For example, Hengtong Optoelectronics, Fiberhome Technology, and many other manufacturers have also shifted their investment focus to optical fiber preforms. For example, Zhongli Technology, Keller Science and Technology.
The domestic market still has potential to tap, and the international market is a bigger blue ocean. Growing Latin America and Africa, as well as emerging markets such as Russia, India and Southeast Asia, will all be potential markets for Chinese fiber manufacturers to expand. At present, the timing and conditions for China's optical fiber manufacturers to go out have matured. In fact, leading manufacturers such as Hengtong Optoelectronics and Fiberhome Communications have already begun to go out. Exploiting the international market is the only way to digest China’s surplus production capacity of optical fiber and optical cables, and it is also the only way for China's optical fiber manufacturers to become bigger and stronger. After more than ten years of hard work and victory in the domestic market, China's optical fiber manufacturers have begun to move toward the international stage and will begin a new round of competition with international competitors.
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