ENVALITH
古河電気工業株式会社 logo

Furukawa Electric Co., Ltd.

5801・Prime Market・Nonferrous Metals

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古河電気工業株式会社 logo
Furukawa Electric Co., Ltd.5801

Business

Furukawa Electric Co., Ltd., founded in 1896, is a major non-ferrous metals and wire/cable manufacturer operating three core businesses: Infrastructure (optical communications and power cables), Electronics & Electrical Components (automotive parts and electronics materials), and Functional Products (heat dissipation & cooling, semiconductor manufacturing tape, and copper foil). Of the consolidated net sales of ¥1,307,560 million, Electronics & Electrical Components accounts for the largest share at ¥756,170 million, followed by Infrastructure at ¥363,941 million and Functional Products at ¥150,804 million. The company has a wide range of manufacturing sites both domestically and overseas, with the overseas sales ratio reaching 50.6%. Major customers span a diverse range including automakers, telecommunications carriers, data center operators, and electric power companies.

Business Model

Based on four core technologies—metal, polymer, photonics, and high-frequency—the company manufactures and sells wires, cables, optical devices, functional materials, and other products. It earns revenue by procuring and processing raw materials (such as copper ingots) and converting them into high-value-added products. While enhancing profitability through appropriate pricing and improved product mix, it also has a structure to improve capital efficiency through synergy creation via M&A and subsidiarization, as well as optimization of its business portfolio.

Company Strengths

The company made Furukawa Ftelecom Optical Components, which holds the world's top share in LN high-speed optical modulators, a subsidiary, and holds a portfolio of high-value-added products including Optical Fiber & Optical Cable (Rollable Ribbon Cable, etc.), MT Ferrules, and DFB Laser Diode Chips. Under a globally unified strategy using the "Lightera" brand, the company has built out its North American sales expansion structure, and the Infrastructure segment achieved operating profit of over ¥21,400 million, up 276.1% year on year.

The company holds four core technologies—metal, polymer, photonics, and high-frequency—and develops products in the fusion domain of information, energy, and mobility. The three segments of Electronics & Electrical Components, Infrastructure, and Functional Products complement one another, and in FY2026 (ending March 2026) all segments achieved increases in both revenue and profit. The track record of achieving all financial targets in the 25 Mid-Term Management Plan (ROIC of 12.2%, ROE of 19.1%, equity ratio of 39.1%, etc.) underpins the company's competitiveness.

By making Furukawa Electric Submarine Cable a subsidiary, the company has strengthened its HVDC cable manufacturing capability, and has decided to newly construct a domestic HVDC production base in Futtsu City, Chiba Prefecture. Against a backdrop of steady demand for replacement of domestic ultra-high-voltage underground lines and for submarine and underground lines for renewable energy, the company continues to expand its manufacturing and construction capabilities for the energy infrastructure business.

ENVALITH's Perspective

Net income attributable to owners of parent for FY2026 (ending March 2026) of ¥72,514 million represents a substantial increase of 117.4% year-on-year, but this is driven by extraordinary gains totaling ¥38,731 million, comprising a gain of ¥19,437 million from revisions to the retirement benefit plan and a gain of ¥19,294 million on sales of investment securities. On an operating profit basis, the result of ¥63,856 million (up 35.8% year-on-year) reflects steady improvement, confirming an enhancement in core business profitability; however, the net profit level from the following period onward should be assessed with consideration for the absence of these extraordinary gains.

The consolidated earnings forecast for FY2027 (ending March 2027) sets ambitious targets of net sales of ¥1,460,000 million (up 11.7% year-on-year) and operating profit of ¥95,000 million (up 48.8% year-on-year). While the continued buoyancy of the data center market is expected to be the main driver, external factors such as the impact of U.S. trade policy, the situation in the Middle East, fluctuations in copper ingot prices, and foreign exchange risk are increasing uncertainty regarding performance. In particular, the impact of the Middle East situation has not been incorporated into the current forecast, and this should be monitored closely as a downside risk.

The company has changed its policy from a previous dividend payout ratio target of around 30% to a dividend on equity (DOE) target of around 3.5%, aiming for stable shareholder returns less susceptible to the impact of single-year performance. The dividend for FY2026 (ending March 2026) is forecast at ¥210 per share (payout ratio of 20.4%), and for FY2027 (ending March 2027), after accounting for the stock split (10-for-1, effective July 1, 2026), an annual dividend of ¥22 (equivalent to ¥220 before the split) is forecast. With an equity ratio of 39.1% and a net D/E ratio of 0.59, the company's financial base remains solid, positioning it to pursue both growth investment and shareholder returns simultaneously.

Growth Strategy

Optimizing the business portfolio around data center, AI, and renewable energy demand, aiming to realize Vision 2030

Integrated three locations—Japan (Lightera Japan), the United States (Lightera, LLC), and Brazil (Lightera LatAm)—under Lightera Holding LLC, establishing a globally unified strategy and decision-making structure. Also advanced the North American sales expansion framework, achieving substantial profit growth in the Infrastructure segment with net sales of ¥363,941 million (up 20.0% year on year) and operating income of ¥21,439 million (up 276.1% year on year).

Acquired Fujitsu Optical Components (now Furukawa Photel Optical Components), which holds the world's top share in LN high-speed optical modulators, as a subsidiary at an acquisition cost of ¥5,959 million. By combining the Company's optical semiconductor light source technology with FOC's LN technology, building a supply structure for high-speed, compact hybrid integrated devices and low-power, wide-bandwidth optical transceivers for the 5G/B5G era.

Made Furukawa Electric Submarine Cable Co., Ltd. (formerly Nippon Submarine Cable) a subsidiary at an acquisition cost of ¥2,207 million, securing a submarine cable manufacturing base and technical talent. Concurrently advancing capital investment to introduce HVDC cable manufacturing equipment and facilities in Futtsu City, Chiba Prefecture and elsewhere, aiming to capture demand for submarine cables for renewable energy applications.

Improved capital efficiency by divesting non-core and unprofitable businesses, including the full transfer of shares in Furukawa Battery Co., Ltd. (December 24, 2025) and the full transfer of equity in Shenyang Furukawa Cable Co., Ltd. (February 10, 2026). Achieved all financial targets for the 25 Medium-Term Management Plan period (ROIC 12.2%, ROE 19.1%, net D/E ratio 0.59, equity ratio 39.1%). Continuing the policy of reinvesting the resources gained into growth areas related to data centers and renewable energy.

Advancing the consolidation of an optical fiber manufacturing company for medical and industrial equipment applications (life science), the start of practical operation of a laser construction system at a major railway company (laser applications), the supply of and investment in high-temperature superconducting wire for a UK fusion reactor development company (superconductivity), and the construction of a demonstration plant for mass production of green LP gas (green LP gas). Achieved a 156% increase in new business R&D expenditure against a target of 125%.

Last updated: July 19, 2026