diff --git a/src/common/StringBuilder.test.ts b/src/common/StringBuilder.test.ts
new file mode 100644
index 000000000..1794de0f7
--- /dev/null
+++ b/src/common/StringBuilder.test.ts
@@ -0,0 +1,143 @@
+/**
+ * Copyright (c) 2026 The xterm.js authors. All rights reserved.
+ * @license MIT
+ */
+
+import { assert } from 'chai';
+import { LimitedStringBuilder, StringBuilder } from 'common/StringBuilder';
+
+describe('StringBuilder', () => {
+  it('should start empty', () => {
+    const builder = new StringBuilder();
+    assert.strictEqual(builder.length, 0);
+    assert.strictEqual(builder.toString(), '');
+  });
+
+  it('should append a single chunk', () => {
+    const builder = new StringBuilder();
+    builder.append('hello');
+    assert.strictEqual(builder.length, 5);
+    assert.strictEqual(builder.toString(), 'hello');
+  });
+
+  it('should join multiple chunks in order', () => {
+    const builder = new StringBuilder();
+    builder.append('foo');
+    builder.append('bar');
+    builder.append('baz');
+    assert.strictEqual(builder.length, 9);
+    assert.strictEqual(builder.toString(), 'foobarbaz');
+  });
+
+  it('should handle empty chunks', () => {
+    const builder = new StringBuilder();
+    builder.append('');
+    builder.append('a');
+    builder.append('');
+    assert.strictEqual(builder.length, 1);
+    assert.strictEqual(builder.toString(), 'a');
+  });
+
+  it('should reset accumulated data', () => {
+    const builder = new StringBuilder();
+    builder.append('hello');
+    builder.reset();
+    assert.strictEqual(builder.length, 0);
+    assert.strictEqual(builder.toString(), '');
+  });
+
+  it('should allow appending after reset', () => {
+    const builder = new StringBuilder();
+    builder.append('old');
+    builder.reset();
+    builder.append('new');
+    assert.strictEqual(builder.toString(), 'new');
+  });
+
+  it('should accumulate many small chunks without quadratic concatenation', () => {
+    const builder = new StringBuilder();
+    const chunk = 'x';
+    const count = 10000;
+    for (let i = 0; i < count; i++) {
+      builder.append(chunk);
+    }
+    assert.strictEqual(builder.length, count);
+    assert.strictEqual(builder.toString(), 'x'.repeat(count));
+  });
+});
+
+describe('LimitedStringBuilder', () => {
+  it('should expose the configured limit', () => {
+    const builder = new LimitedStringBuilder(42);
+    assert.strictEqual(builder.limit, 42);
+  });
+
+  it('should start empty', () => {
+    const builder = new LimitedStringBuilder(10);
+    assert.strictEqual(builder.length, 0);
+    assert.strictEqual(builder.toString(), '');
+  });
+
+  it('should accept data up to the limit', () => {
+    const builder = new LimitedStringBuilder(10);
+    assert.strictEqual(builder.append('12345'), false);
+    assert.strictEqual(builder.append('67890'), false);
+    assert.strictEqual(builder.length, 10);
+    assert.strictEqual(builder.toString(), '1234567890');
+  });
+
+  it('should accept a single chunk exactly at the limit', () => {
+    const builder = new LimitedStringBuilder(5);
+    assert.strictEqual(builder.append('abcde'), false);
+    assert.strictEqual(builder.length, 5);
+    assert.strictEqual(builder.toString(), 'abcde');
+  });
+
+  it('should reject data exceeding the limit and clear the buffer', () => {
+    const builder = new LimitedStringBuilder(5);
+    builder.append('abc');
+    assert.strictEqual(builder.append('def'), true);
+    assert.strictEqual(builder.length, 0);
+    assert.strictEqual(builder.toString(), '');
+  });
+
+  it('should reject a single chunk larger than the limit', () => {
+    const builder = new LimitedStringBuilder(3);
+    assert.strictEqual(builder.append('toolong'), true);
+    assert.strictEqual(builder.length, 0);
+    assert.strictEqual(builder.toString(), '');
+  });
+
+  it('should allow appending again after reset following a limit breach', () => {
+    const builder = new LimitedStringBuilder(3);
+    assert.strictEqual(builder.append('abcd'), true);
+    builder.reset();
+    assert.strictEqual(builder.append('ab'), false);
+    assert.strictEqual(builder.toString(), 'ab');
+  });
+
+  it('should accumulate many chunks before hitting the limit', () => {
+    const limit = 100;
+    const builder = new LimitedStringBuilder(limit);
+    const chunk = 'A';
+    for (let i = 0; i < limit; i++) {
+      assert.strictEqual(builder.append(chunk), false);
+    }
+    assert.strictEqual(builder.toString(), 'A'.repeat(limit));
+    assert.strictEqual(builder.append('B'), true);
+    assert.strictEqual(builder.toString(), '');
+  });
+
+  it('should reject when limit is zero and any data is appended', () => {
+    const builder = new LimitedStringBuilder(0);
+    assert.strictEqual(builder.append('a'), true);
+    assert.strictEqual(builder.length, 0);
+  });
+
+  it('should allow zero-length appends at the limit', () => {
+    const builder = new LimitedStringBuilder(0);
+    assert.strictEqual(builder.append(''), false);
+    assert.strictEqual(builder.length, 0);
+    assert.strictEqual(builder.toString(), '');
+  });
+});
diff --git a/src/common/StringBuilder.ts b/src/common/StringBuilder.ts
new file mode 100644
index 000000000..d9184ce31
--- /dev/null
+++ b/src/common/StringBuilder.ts
@@ -0,0 +1,67 @@
+/**
+ * Copyright (c) 2026 The xterm.js authors. All rights reserved.
+ * @license MIT
+ */
+
+/**
+ * Accumulates string data from multiple chunks without O(n²) string concatenation.
+ */
+export class StringBuilder {
+  private _chunks: string[] = [];
+  private _length = 0;
+
+  public get length(): number {
+    return this._length;
+  }
+
+  public reset(): void {
+    this._chunks.length = 0;
+    this._length = 0;
+  }
+
+  public append(chunk: string): void {
+    this._chunks.push(chunk);
+    this._length += chunk.length;
+  }
+
+  public toString(): string {
+    return this._chunks.join('');
+  }
+}
+
+/**
+ * String builder that rejects payloads larger than a fixed limit.
+ */
+export class LimitedStringBuilder {
+  private readonly _builder = new StringBuilder();
+
+  constructor(private readonly _limit: number) { }
+
+  public get length(): number {
+    return this._builder.length;
+  }
+
+  public get limit(): number {
+    return this._limit;
+  }
+
+  public reset(): void {
+    this._builder.reset();
+  }
+
+  /**
+   * @returns true if the limit was exceeded (buffer is cleared in that case)
+   */
+  public append(chunk: string): boolean {
+    this._builder.append(chunk);
+    if (this._builder.length > this._limit) {
+      this._builder.reset();
+      return true;
+    }
+    return false;
+  }
+
+  public toString(): string {
+    return this._builder.toString();
+  }
+}
diff --git a/src/common/parser/ApcParser.ts b/src/common/parser/ApcParser.ts
index 8f921f8cb..4e647d037 100644
--- a/src/common/parser/ApcParser.ts
+++ b/src/common/parser/ApcParser.ts
@@ -7,6 +7,7 @@ import { IApcHandler, IHandlerCollection, ApcFallbackHandlerType, IApcParser, IS
 import { ParserConstants } from 'common/parser/Constants';
 import { utf32ToString } from 'common/input/TextDecoder';
 import { IDisposable } from 'common/Types';
+import { LimitedStringBuilder } from 'common/StringBuilder';
 
 const EMPTY_HANDLERS: IApcHandler[] = [];
 
@@ -153,13 +154,13 @@ export class ApcParser implements IApcParser {
 export class ApcHandler implements IApcHandler {
   private static _payloadLimit = ParserConstants.PAYLOAD_LIMIT;
 
-  private _data = '';
+  private _data = new LimitedStringBuilder(ApcHandler._payloadLimit);
   private _hitLimit: boolean = false;
 
   constructor(private _handler: (data: string) => boolean | Promise<boolean>) { }
 
   public start(): void {
-    this._data = '';
+    this._data.reset();
     this._hitLimit = false;
   }
 
@@ -167,9 +168,7 @@ export class ApcHandler implements IApcHandler {
     if (this._hitLimit) {
       return;
     }
-    this._data += utf32ToString(data, start, end);
-    if (this._data.length > ApcHandler._payloadLimit) {
-      this._data = '';
+    if (this._data.append(utf32ToString(data, start, end))) {
       this._hitLimit = true;
     }
   }
@@ -179,18 +178,18 @@ export class ApcHandler implements IApcHandler {
     if (this._hitLimit) {
       ret = false;
     } else if (success) {
-      ret = this._handler(this._data);
+      ret = this._handler(this._data.toString());
       if (ret instanceof Promise) {
         // need to hold data until `ret` got resolved
         // dont care for errors, data will be freed anyway on next start
         return ret.then(res => {
-          this._data = '';
+          this._data.reset();
           this._hitLimit = false;
           return res;
         });
       }
     }
-    this._data = '';
+    this._data.reset();
     this._hitLimit = false;
     return ret;
   }
diff --git a/src/common/parser/DcsParser.ts b/src/common/parser/DcsParser.ts
index 692200230..25c22b8dd 100644
--- a/src/common/parser/DcsParser.ts
+++ b/src/common/parser/DcsParser.ts
@@ -8,6 +8,7 @@ import { IDcsHandler, IParams, IHandlerCollection, IDcsParser, DcsFallbackHandle
 import { utf32ToString } from 'common/input/TextDecoder';
 import { Params } from 'common/parser/Params';
 import { ParserConstants } from 'common/parser/Constants';
+import { LimitedStringBuilder } from 'common/StringBuilder';
 
 const EMPTY_HANDLERS: IDcsHandler[] = [];
 
@@ -140,7 +141,7 @@ EMPTY_PARAMS.addParam(0);
 export class DcsHandler implements IDcsHandler {
   private static _payloadLimit = ParserConstants.PAYLOAD_LIMIT;
 
-  private _data = '';
+  private _data = new LimitedStringBuilder(DcsHandler._payloadLimit);
   private _params: IParams = EMPTY_PARAMS;
   private _hitLimit: boolean = false;
 
@@ -152,7 +153,7 @@ export class DcsHandler implements IDcsHandler {
     // perf optimization:
     // clone only, if we have non empty params, otherwise stick with default
     this._params = (params.length > 1 || params.params[0]) ? params.clone() : EMPTY_PARAMS;
-    this._data = '';
+    this._data.reset();
     this._hitLimit = false;
   }
 
@@ -160,9 +161,7 @@ export class DcsHandler implements IDcsHandler {
     if (this._hitLimit) {
       return;
     }
-    this._data += utf32ToString(data, start, end);
-    if (this._data.length > DcsHandler._payloadLimit) {
-      this._data = '';
+    if (this._data.append(utf32ToString(data, start, end))) {
       this._hitLimit = true;
     }
   }
@@ -172,20 +171,20 @@ export class DcsHandler implements IDcsHandler {
     if (this._hitLimit) {
       ret = false;
     } else if (success) {
-      ret = this._handler(this._data, this._params);
+      ret = this._handler(this._data.toString(), this._params);
       if (ret instanceof Promise) {
         // need to hold data and params until `ret` got resolved
         // dont care for errors, data will be freed anyway on next start
         return ret.then(res => {
           this._params = EMPTY_PARAMS;
-          this._data = '';
+          this._data.reset();
           this._hitLimit = false;
           return res;
         });
       }
     }
     this._params = EMPTY_PARAMS;
-    this._data = '';
+    this._data.reset();
     this._hitLimit = false;
     return ret;
   }
diff --git a/src/common/parser/OscParser.ts b/src/common/parser/OscParser.ts
index 1f0c8cb23..3e05f2298 100644
--- a/src/common/parser/OscParser.ts
+++ b/src/common/parser/OscParser.ts
@@ -7,6 +7,7 @@ import { IOscHandler, IHandlerCollection, OscFallbackHandlerType, IOscParser, IS
 import { OscState, ParserConstants } from 'common/parser/Constants';
 import { utf32ToString } from 'common/input/TextDecoder';
 import { IDisposable } from 'common/Types';
+import { LimitedStringBuilder } from 'common/StringBuilder';
 
 const EMPTY_HANDLERS: IOscHandler[] = [];
 
@@ -194,13 +195,13 @@ export class OscParser implements IOscParser {
 export class OscHandler implements IOscHandler {
   private static _payloadLimit = ParserConstants.PAYLOAD_LIMIT;
 
-  private _data = '';
+  private _data = new LimitedStringBuilder(OscHandler._payloadLimit);
   private _hitLimit: boolean = false;
 
   constructor(private _handler: (data: string) => boolean | Promise<boolean>) { }
 
   public start(): void {
-    this._data = '';
+    this._data.reset();
     this._hitLimit = false;
   }
 
@@ -208,9 +209,7 @@ export class OscHandler implements IOscHandler {
     if (this._hitLimit) {
       return;
     }
-    this._data += utf32ToString(data, start, end);
-    if (this._data.length > OscHandler._payloadLimit) {
-      this._data = '';
+    if (this._data.append(utf32ToString(data, start, end))) {
       this._hitLimit = true;
     }
   }
@@ -220,18 +219,18 @@ export class OscHandler implements IOscHandler {
     if (this._hitLimit) {
       ret = false;
     } else if (success) {
-      ret = this._handler(this._data);
+      ret = this._handler(this._data.toString());
       if (ret instanceof Promise) {
         // need to hold data until `ret` got resolved
         // dont care for errors, data will be freed anyway on next start
         return ret.then(res => {
-          this._data = '';
+          this._data.reset();
           this._hitLimit = false;
           return res;
         });
       }
     }
-    this._data = '';
+    this._data.reset();
     this._hitLimit = false;
     return ret;
   }