The optical fiber market is still out of balance, and more consolidation is required to balance supply and demand.
This is the finding of KMI Research's recent report, "Worldwide Optical Fiber and Cable Markets: Market Developments and Forecast."
The report states that the world's last optical fiber shortage ended in 2001 when demand peaked at 119 million kilometers. Two years later in 2003 fiber shipments to cable manufacturers dropped by 47% to 63.5 million km.
On the other hand, worldwide fiber-making capacity only decreased by 10% to 145 million km, down from 161 million km in 2001. According to the report, this overcapacity has resulted in aggressive price competition. For the 47 fiber-manufacturing facilities that operated for at least part of 2003, average-capacity utilization for all facilities was less than 50%. This overcapacity meant the worldwide average price for conventional singlemode fiber fell from $35 per km in 2001 to a record low of $15 per km in 2003. The combination of lower prices for all types of fiber and lower unit-quantity shipments means that the market for bare fiber was $1.3 billion in 2003, down 75% from 2001.
The demand forecast shows that Asia will continue to be the largest regional market for cabled-fiber. Asia accounted for 66% of all cable-fiber demand in 2003, up from 29% in 2000. North America, however, fell from a 40% share in 2000 to an 18% share in 2003.
KMI is based in Providence, RI. For more information visit www.kmiresearch.com.
