HFCL and Sterlite Technologies are seeing strong demand from global data centre expansion, with exports rising and fresh investments underway to tap a multi-year growth cycle driven by AI, cloud, and hyperscale infrastructure.
Indian optical fibre manufacturers HFCL and Sterlite Technologies are reportedly gearing up for a sustained period of growth, driven by rising global demand for data centre infrastructure. Senior executives from both firms indicate that the sector is entering a structural upcycle, largely fuelled by hyperscale cloud providers and artificial intelligence (AI)-led workloads across the US and European markets.
Despite ongoing challenges such as higher logistics costs, supply chain disruptions, and input price volatility, demand for fibre optic solutions continues to remain strong. Companies are responding by increasing capital investments and expanding manufacturing capacity to tap into growing export opportunities.
Data centre demand reshaping fibre market
The rapid expansion of data centres is emerging as a key growth driver for fibre optic manufacturers. Increasing adoption of AI technologies and the shift towards GPU-based computing architectures are significantly boosting the need for high-capacity fibre connectivity within and between data centres.
According to reports, executives note that the evolving architecture of AI workloads requires enhanced “east-west” connectivity—linking servers within data centres—which is intensifying fibre usage. Industry estimates suggest that data centres could account for nearly one-third of global fibre demand over the next few years, signalling a major shift in market dynamics.
Exports have become a major revenue contributor, particularly for HFCL, with a substantial share of its fibre output being shipped to international markets, especially the United States. The company has also seen strong demand for specialised cables designed for high-density data centre environments.
Capacity expansion and India opportunity
To capitalise on the demand surge, both companies are ramping up investments. HFCL is expanding its fibre manufacturing capacity and investing in backward integration to strengthen supply chain stability and manage costs more effectively. The company is also entering the data centre interconnect solutions segment, expecting it to contribute significantly to revenues in the coming years.
Sterlite Technologies is similarly increasing investments to enhance its production capabilities across India and the US. The company is also focusing on advanced connectivity solutions that support next-generation data centre networks.
At the same time, both firms are positioning themselves for emerging opportunities in India’s AI-driven data centre ecosystem. Global players such as Google and domestic giants including Reliance Industries and Bharti Airtel are investing heavily in building AI-ready infrastructure, creating a robust pipeline of demand.
While HFCL sees domestic telecom demand currently stabilising between technology cycles, Sterlite Technologies remains optimistic about continued growth driven by fibre-to-the-home deployments and government-backed initiatives. Together, these trends are expected to sustain India’s fibre optics industry over the next several years.
