Fujikura Ltd.

Business Details

This segment handles optical fiber, optical cable, communication components, optical components, optical equipment, network equipment, and construction services. Major customers are US hyperscale data center operators and European/US telecom carriers. Growth in data center demand, driven by the spread and expansion of generative AI, is the primary growth engine, and this core segment accounts for more than half of the group's total revenue and operating profit. It has numerous consolidated subsidiaries in Japan and overseas, and conducts business globally.

Recent Overview

Achieved substantial growth with segment revenue up 44.7% and operating profit up 65.7%, driven by AI demand

In FY2026 (ending March 2026), the Information & Communications Segment achieved revenue of ¥652,977 million (up 44.7% year on year) and operating profit of ¥152,729 million (up 65.7% year on year), driven by continued growth in data center demand amid the spread and expansion of generative AI. Revenue from the US increased substantially to ¥456,982 million from ¥369,465 million in the prior year. In March 2026, the company decided to invest up to a combined ¥300 billion in Japan and the US to expand production capacity by up to three times. For FY2027 (ending March 2027), the company expects continued growth in demand from North American hyperscale data centers, but has conservatively factored in concerns about procurement of raw materials such as hydrogen amid the rapid increase in optical cable production.

Key Products

Growth Drivers

• Continued growth in demand for optical fiber and connectors from US hyperscale data centers, driven by the spread and expansion of generative AI
• Expansion of optical fiber cable production capacity to up to three times current levels through a combined investment of up to ¥300 billion in Japan and the US
• Maintaining and strengthening differentiation advantage through continued introduction of new products such as the world's first 13,824-fiber SWR®/WTC®
• Promotion of customer development in global markets including Europe and Asia (European revenue of ¥53,706 million, up 69.7% year on year)
• Increased production of MT/MMC ferrules and strengthened wiring component production capacity at plants in Vietnam, Mexico, and Poland
• Competitive advantage through provision of total solutions including optical fiber cables, fusion splicers, optical connectors, and telecom engineering

Risks

• Risk of shortages in procurement of certain raw materials such as hydrogen due to the rapid increase in optical cable production (conservatively factored into the FY2027 earnings forecast)
• Risk of logistics disruption and naphtha supply-demand tightening due to a blockade of the Strait of Hormuz, leading to raw material supply shortages and price increases
• Risk of economic slowdown concerns and foreign exchange fluctuations due to US tariff policy under the Trump administration
• Risk of a sharp decline in demand due to fluctuations in the data center capital expenditure cycle
• Intensifying competition with other companies in the optical fiber and connector markets
• Risk of increased fixed costs and investment recovery risk associated with production capacity expansion investment (up to a combined ¥300 billion in Japan and the US)
• Concentration of geopolitical and foreign exchange risk due to high dependence on North American revenue (¥456,982 million, approximately 70% of the Information & Communications Segment's external revenue)