Optical fibers (freepik photo)
The global crisis reaches another and particularly important product: optical fibers. The Financial Times reports that the increasing global demand for optical fibers, combined with difficulties in production, have caused price increases of tens of percent and long delays in the supply of fibers even to companies willing to pay the current high prices.
According to research group Cru, the price of fiber optics has jumped from $3.70 per km in March 2021 to $6.30 per km now – a 70% jump in 16 months. At the same time, according to Martin Blanken of infrastructure company Exa, delivery wait times for fiber optic orders have stretched from 20 weeks to more than a year for smaller companies that cannot afford to pay for high priority delivery.
The shortage is caused by several reasons: on the one hand, the accelerated global retirement of optical fibers, which causes a considerable increase in the amount of orders, along with an increase in the use of fibers also within the server centers of Internet service companies, which contributes to the tremendous demand; On the other hand, a global shortage of helium – whose price has doubled in the last two years from $930 to $2,000 per 100-liter container – makes it difficult for the fiber production process, of which liquid gas is an important part.
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Michael Finch, an analyst at Cru, told the FT that “given that the cost of retirement has suddenly doubled, questions are now being asked such as whether countries will meet the goals they have set for infrastructure retirement, and whether there will be consequences for global connectivity.”
In the first half of the year, the use of optical fibers increased by 8.1%, with 46% of the global supply going to China and 15% to North America (USA and Canada).
Wendell Weeks, CEO of the glass giant Corning, which is one of the largest manufacturers of optical fibers in the world, said that “in my professional career I have never seen anything like this inflationary crisis.” In the first quarter, the company’s revenues from optical fibers grew by 28% to 1.3 billion dollar, and this is its main income – more than the durable glasses for smartphones and the Pyrex cooking and baking brand.
Meanwhile, from conversations that the ice website has with the fiber companies in Israel, it seems that they do not feel any real harm from the crisis. Industry sources said that there are enough fiber reserves in Israel to complete most of the retirement, which should be completed by the end of the year, after which it will slow down anyway, as happens with the retirement of any communication infrastructure when what remains are the less economically attractive parts of the country.
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