U.S. optical fiber and cable vendors preserve global market dominance
U.S. producers of optical fiber and cable adapted successfully to, and remained pre-eminent in, changing competitive conditions in global markets from 1989 to 1993.
In fact, U.S. manufacturers accounted for 51% of the $3.1 billion in total global shipments of optical fiber and cable in 1993, according to the U.S. International Trade Commission`s report Industry and Trade Summary: Optical Fiber, Cable and Bundles (USITC Publication 2851, February 1995).
Despite slower growth rates in demand for optical fiber in long-distance telecommunications markets, U.S. producers took advantage of expanding needs for optical fiber and cable in local telephone, cable-TV and data communications markets to boost their domestic sales.
In addition, U.S. producers overcame the sluggish demand for these optical products in traditional foreign markets, such as France and Germany, by increasing their exports to emerging telecommunications markets in central Europe, eastern Asia and Latin America.
Domestic profile
According to the report, approximately 55 companies (with almost 7000 employees) manufactured optical fiber and cable in the United States in 1993.
In the optical fiber market, two companies, Corning Inc. in Corning, NY, and AT&T Network Cable Systems in Norcross, GA, shipped more than 70% of the total U.S. production. In the optical fiber cable market, Siecor Corp. in Hickory, NC, and AT&T led the production field. Most of the other U.S.-based manufacturers of optical fiber cable bought their optical fiber from Corning, AT&T and Spectran Corp. in Sturbridge, MA.
U.S. consumption of optical fiber and cable increased at an average annual rate of 17% during 1989 to 1993, reaching $1.6 billion in 1993. Although the telecommunications market continued to dominate U.S. consumption of optical fiber and cable, the demand for optical fiber in the cable-TV and data communications markets grew more rapidly.
Growing demand in local and private communications networks made u¥for the declining market growth in domestic long-distance networks. New federal and state regulations aided the increased demand for optical fiber and cable by facilitating entry and promoting competition in the telecommunications and cable-TV markets.
Shipments of optical fiber and cable by U.S. producers increased by an average annual rate of 17% during 1989 to 1993, attaining $1.83 billion in 1993. However, growth in total sales value of optical fiber and cable slowed in 1993, compared to 1992, despite a considerable increase in product quantities. This slowdown was attributed to price competition in sales to telephone and cable-TV companies.
Imports of optical fiber and cable by U.S. companies increased by an average annual rate of 22% from 1989 to 1993, to nearly $90 million in 1993. The largest suppliers of optical imports in 1993 were Canada ($48.4 million), Japan ($18.3 million) and Denmark ($7.5 million). These countries accounted for more than 80% of the total U.S. imports; Germany ($4.6 million) and China ($4.3 million) were close behind.
The bulk of imports from all foreign sources except Japan were supplied by subsidiaries or joint-venture partners of U.S.-based optical fiber and cable producers. U.S. producers needed the imports to supplement their own domestic production to meet growing demands in U.S. markets.
Exports of optical fiber and cable by U.S. companies increased by an average annual rate of 23% from 1989 to 1993, to tally more than $325 million in 1993, or almost 18% of total U.S. producers` shipments.
The major markets for U.S. exports were Canada ($70.1 million), Japan ($36.6 million), Mexico ($31.9 million), the United Kingdom ($25.0 million), China ($16.2 million) and Argentina ($16.2 million). Together, Canada and Japan accounted for nearly one-third of the export total.
The U.S. trade surplus for optical fiber and cable increased by an average annual rate of 23% from 1989 to 1993, reaching $235 million in 1993. The U.S. optical fiber market maintained significant surpluses with the United Kingdom, Canada and Japan throughout much of the study period.
During the latter part of the period, much of the surplus growth resulted from increased exports to Mexico, China, Argentina, Poland and Brazil. These countries devoted significant resources to improving their telecommunications infrastructures. Because of the strength and manufacturing capacity of U.S. optical fiber and cable producers, the United States did not experience trade deficits with any countries in 1993.
In Japan, the three largest manufacturers of optical fiber and cable--Sumitomo Electric Industries Ltd. in Yokohama, Fujikura Ltd. in Tokyo and Furukawa Electric Co. in Tokyo--held a combined 83% share of the Japanese market in 1993. Sumitomo--the leader at 33%--accounted for approximately 9% of the total worldwide production of optical fiber in 1993, making it the third largest producer behind AT&T and Corning.
Fujikura and Furukawa each captured 25% of the Japanese market. Further behind were Hitachi Cable Ltd. in Tokyo and Mitsubishi Cable Industries in Tokyo, each with 5% shares.
Japan is the largest producer of plastic optical fiber. Approximately 90% of the estimated 180,000 miles of plastic optical fiber annually produced in the world is made by Mitsubishi Rayon Co. in Tokyo, Toray Industries Inc. in Chiba and Asahi Chemical Industry Co. Ltd. in Tokyo.
Dynamic growth in demand for optical fiber and cable is taking place in the developing east Asian countries of China, Taiwan, Singapore Thailand, Malaysia and Indonesia (see Lightwave, April 1995, page 13). With relatively underdeveloped telecommunications infrastructures in these countries, governments are eager to adopt fiber-optic and digital technologies.
By consuming 26% of the global market, Europe is the largest market for optical fiber and cable after the United States. During 1992 and 1993, however, the European market contracted markedly because of market recessions in France, Germany and Italy. On the other hand, improved economic conditions and a liberalized regulatory environment enabled the British market to expand.
In European markets, Alcatel Cable in Clichy, France; Siecor GmbH in Neustadt/Coburg, Germany; and Pirelli Cavi Speciali in Milan, Italy; are the leading manufacturers of optical fiber and cable. Based in several countries, including France and Germany, Alcatel accounted for approximately 8% of the total global production of optical fiber, making the company the fourth largest global producer. It is also a leading world producer of optical cable. q
This information was extracted from USITC Publication 2851 by the Lightwave editorial staff. The full report may be ordered without charge by calling (202) 205-1809 or faxing (202) 205-2104.