Demand for fiber-optic cable causes shortages and increased prices

The demand for fiber-optic cable has caused a shortage in the industry and increased prices for installers. However, according to Cliff Hund, director of marketing and strategic planning at Corning Inc. (Corning, NY), "The problem is in the demand for singlemode fiber. Demand for multimode fiber is being met without problems."

Barbara E. Thompson

The demand for fiber-optic cable has caused a shortage in the industry and increased prices for installers. However, according to Cliff Hund, director of marketing and strategic planning at Corning Inc. (Corning, NY), "The problem is in the demand for singlemode fiber. Demand for multimode fiber is being met without problems."

Raw materials, labor and transportation cost increases during the past several years have driven up fiber-optic cable prices. Last February, Corning Inc. increased the price of its singlemode fiber products by 8%, followed in April by Siecor Corp. (Hickory, NC), which increased the list price of its optical-fiber cable by 12% (see "Moves, adds and changes," June 1995, page 74). And, in July, Alcatel (Claremont, NC) announced a price increase from 6% to 10%.

According to Craig Lemrow, director of marketing at Pirelli Cable Corp. (Lexington, SC), "Two things are causing the shortage--a marked increase in demand for cable and the inability to get fiber." He blames the problem on the fact that cablers are not receiving optical fiber in a timely fashion. "For us, it`s not a cable supplier shortage; it`s a fiber supplier shortage."

Manufacturing expansion

The fiber cable market has been growing 15% to 25% per year during the last several years. To cope with this demand, manufacturers plan to expand.

For example, Corning announced last February that it was investing more than $150 million to increase the capacity of its optical fiber manufacturing facility in Wilmington, NC. AT&T is reported to be scaling up production at its Norcross, GA, facility. And Alcatel, just two years after completing its $100 million investment in a new optical fiber plant and fiber-cable plant expansion in Claremont, NC, has announced that it is investing $50 million more to increase plant capacity.

Lemrow does not foresee the cable shortage ending this year. "Manufacturers are trying to improve output, but it`s going to take at least a year before conditions turn around," he says.

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