Not only are memory prices rising sharply, but fiber optics are also becoming more expensive thanks to AI data centers.
The AI infrastructure boom is not limited to chips and memory. Optical fiber is also becoming scarcer and more expensive, presenting telecom operators with new challenges.
75 percent price increase
The price of single-mode G.652.D fiber rose by 75 percent in January. This brings the fiber to its highest price level in seven years.
According to the China Electronic Components Industry Association, the four largest Chinese producers are operating at maximum capacity. International suppliers are also close to their production limits. Demand exceeds supply, and this imbalance does not seem likely to disappear in the short term.
The primary cause is the global rollout of AI data centers. New hyperscale sites require enormous amounts of fiber optics for internal connections and long-distance infrastructure. This creates double pressure: more volume and higher prices.
Telecom projects on hold
The rising costs are already having concrete consequences, according to Datacenterknowledge. China Telecom suspended two fiber optic projects in Guangdong, including a tender worth the equivalent of 1.3 billion dollars. Besides AI, geopolitics also plays a role. In the war between Russia and Ukraine, drones have been deployed since 2024 that communicate via long fiber optic cables to avoid electronic interference.