GF SECURITIES·2026-03-23 07:26Core Viewpoints - The report emphasizes the continuous improvement of AI network density and scalability through new products in the optical fiber and cable industry, highlighting investment opportunities in this sector [1][6][13]. Market Review - The communication sector outperformed the CSI 300 index by 4.29 percentage points during the period from March 16 to March 20, 2026, with a sector increase of 2.10% compared to a decrease of 2.19% for the index [17]. - Over the past 30 days, the communication sector rose by 6.2%, significantly outperforming both the ChiNext and CSI 300 indices [18]. - Year-to-date, the communication sector has increased by 8.5%, again outperforming the broader market indices [18]. Industry Data Updates - As of the end of 2025, China had 4.838 million 5G base stations, marking a net increase of 588,000 from the previous year, with 5G stations accounting for 37.6% of all mobile phone base stations [30]. - In January 2026, the domestic smartphone shipment was 22.866 million units, a year-on-year decrease of 16.1%, with 5G smartphones making up 86.9% of total shipments [31]. - The number of mobile IoT terminal users reached 2.888 billion by the end of 2025, with a net increase of 232 million users [33]. Key Company Developments - Corning showcased multi-core fiber and MMC connectors at the OFC 2026, which are expected to enhance data center network density significantly. Their multi-core fiber solution can increase fiber capacity several times while reducing cable quality by up to 70% and installation time by up to 60% [6][14]. - Yangtze Optical Fibre and Cable demonstrated new AI-oriented optical fibers and ultra-high-speed interconnection solutions, including a hollow-core fiber with a length of 91.2 km and a loss of 0.04 dB/km, aimed at future AI computing centers [6][15]. - The report suggests focusing on the optical fiber and cable sector due to improving supply-demand dynamics and the introduction of high-value products, with a recommendation to pay attention to leading companies like Yangtze Optical Fibre, Hengtong Optic-Electric, Zhongtian Technology, and FiberHome [6][15].