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Submarine cable has gradually become a profit growth point
The "Twelfth Five-Year Plan" has placed a strong emphasis on promoting new energy infrastructure, which has created significant opportunities for the development of specialized cables, including submarine cables. As more renewable energy projects—such as nuclear power, solar, and wind energy—come online, the demand for high-performance submarine cables has surged. These cables must meet rigorous standards for wear resistance, corrosion protection, and efficient power transmission, resulting in higher output compared to conventional cables. Currently, submarine cables are primarily used in two key areas: offshore oil drilling platforms and the transmission of electricity from offshore wind farms.
Beyond these applications, submarine cables also play a critical role in long-distance communication networks, especially between islands and in military installations across seas. Although they are generally more expensive than overhead lines of the same length, submarine cables can be more cost-effective for power delivery in offshore regions, offering greater efficiency and reliability. Countries with extensive coastlines and numerous islands have increasingly adopted submarine cables due to their practical advantages.
According to the "2012-2016 China Submarine Cable Market Analysis and Investment Value Study Report" by Champion Consulting, the future direction of the submarine cable industry is becoming clearer. The development of new energy sources, particularly offshore wind power, is a central focus of the Twelfth Five-Year Plan. This indicates that the submarine cable market holds great potential for growth in the coming years.
The construction of offshore oil rigs is expected to significantly boost the demand for submarine cables. Drilling platforms can be categorized into mobile and semi-submersible types, each requiring approximately 150 km and 180 km of cables, respectively. Additionally, platforms can be divided into drilling, production, and living platforms, with each type requiring around 200 km, 200 km, and 100 km of cables. Given the rich resources found in China’s shallow continental shelves, it's likely that more offshore oil and gas operations will emerge, further increasing the need for submarine cables.
In recent years, the military sector has also become an important market for cable companies. Despite challenges in the domestic shipbuilding industry, there remains a steady demand from fisheries and maritime authorities. As China continues to develop its oceanic capabilities, the demand for advanced wire ropes and submarine cables for official vessels is expected to grow. This presents a favorable opportunity for large cable manufacturers with strong brand and technological positions.
Experts emphasize that Chinese submarine cable development should not only focus on product quality but also on building a comprehensive supply chain. Currently, only a few domestic companies produce submarine cables, and most do not offer installation services. In contrast, global leaders like Nexen and ABB provide full-service solutions—from design and manufacturing to laying and maintenance. This gap highlights the need for improvement in China's cable industry.
China’s submarine cable market is vast and growing, making it a key driver for profit growth among cable companies undergoing industrial upgrades. However, challenges remain at every stage, from design and manufacturing to laying. While some companies can produce cables up to 220 kV, they still rely on foreign technologies for insulation materials, jointing techniques, and installation. Domestic teams are mostly limited to shallow waters, underscoring the need to strengthen R&D, improve raw materials, and build internal installation capabilities.
Many Chinese cable companies face issues such as poor production management, low-quality products, and minimal investment in research and development. With average R&D spending below 1% of sales, the market is plagued by price wars and disorderly competition, leading to a situation where inferior products often outcompete better ones.
As the global economy recovers slowly, the Chinese cable industry is entering an era of thin margins. In the highly competitive low-end market, achieving industrial upgrading is the most pressing challenge for Chinese cable companies.