Amid the rapid development of digitalization and artificial intelligence, the importance of data centers has become increasingly prominent, and the demand for fiber optic cables has also become a focus of industry attention. According to the latest data center fiber optic cable demand forecast report released by CRU, the global data center market is experiencing rapid growth, with North America, Europe, and China serving as the primary growth drivers. By 2025, the demand for fiber optic cables in data centers is expected to account for approximately 5% of the global total, with North America's share exceeding 14%. By the end of the century, the global share is projected to surpass 11%. Notably, the application of single-mode and multi-mode fiber optic cables in cloud computing and AI data centers has shown significant growth, indicating a promising future for the data center optical communication sector.
Two key factors driving this demand growth are the widespread adoption of generative AI technology and increased investment in data center construction. Data shows that from 2019 to 2024, U.S. data center construction expenditures grew by approximately 210%, with substantial capital investment accelerating the rapid development of data centers. At the same time, the rapid advancement of AI technology has placed higher demands on data transmission speed and low latency. As a core medium for data transmission, fiber optic cables have experienced explosive demand growth. Whether for connections between servers within data centers or communication between data centers, fiber optic cables play an indispensable role.
To more accurately predict demand, CRU collaborated with LightCounting to adopt a more scientific forecasting approach. Based on optical transceiver shipment data and considering factors such as transmission distance and fiber count, they precisely calculated the core-kilometer demand for different types of fiber optic cables, categorizing them by AI, non-AI, and data center interconnect applications. This provides highly valuable insights for the industry.
From a technological perspective, single-mode fiber has become the preferred solution for both internal and external data center connections due to its superior performance. Combined with DWDM technology, single-mode fiber significantly enhances bandwidth capacity. Additionally, data centers are gradually transitioning to 400G, 800G, and even 1.6T solutions to meet the growing demand for data transmission. OM5 fiber, as a new generation of multi-mode fiber, supports multiple wavelengths on a single fiber, enabling higher data rates and extending the application lifespan of multi-mode fiber in short-distance, high-speed connections.
These technological advancements provide data centers with more efficient, scalable, and cost-effective fiber optic cable solutions, better meeting the needs of the digital economy. Meanwhile, emerging technologies such as silicon photonics continue to drive the evolution of fiber optic solutions.
In terms of demand categorization, the influence of AI technology is particularly notable.
In 2024, fiber optic cable demand for AI applications grew by 138% year-on-year, with an expected growth of 77% in 2025 and a five-year compound annual growth rate of 26% by 2029, far exceeding non-AI applications. It is clear that AI has become the core driver of fiber optic cable demand growth in data centers.
As data centers continue to evolve to meet the escalating demands of the digital economy, the industry is expected to maintain its expansion. The integration of DWDM technology and next-generation fiber will play a critical role in supporting exponential data traffic growth while delivering more cost-effective and energy-efficient connectivity solutions.