Japanese cable maker Fujikura sees stock surge 400% on AI-fueled demand for fiber optics
In context: After barely weathering the pandemic in 2020, Fujikura is now enjoying a period of unprecedented growth in the Japanese stock market, driven by demand in AI and data center operations. The Tokyo-based company specializes in manufacturing electrical equipment, including power and telecommunication systems, optical fiber devices, and more.
Fujikura Ltd., founded by Zenpachi Fujikura in 1885, continues to thrive, fueled by the rapid growth of AI products and research initiatives. Originally focused on producing silk and cotton-insulated wires, the company has evolved to specialize in advanced cable systems for the modern tech industry.
According to a recent Bloomberg report, Fujikura has become the best-performing stock on the Nikkei 225 Stock Average, with its share price surging over 400 percent in 2024. The company is also set to join the widely followed MSCI global stock market index.
One of Fujikura’s most in-demand products is its ultra-thin fiber optic cables, which boast some of the smallest diameters in the industry. These cables can be deployed in tight spaces without requiring additional tunneling, according to CFO Kazuhito Iijima. Notably, Apple is one of Fujikura’s largest customers.
Iijima noted that demand for data center products began surging significantly around 2022, leaving company executives puzzled at first. Now, it’s clear that AI is the primary driver behind the booming business. Fujikura is projected to achieve ¥104 billion ($674 million) in operating income during the current fiscal year, marking a 17 percent year-over-year increase.
A substantial 70 percent of Fujikura’s revenue comes from outside Japan, with 38 percent originating from the United States. In 2020, the company faced its first loss in a decade, attributed to the Covid-19 pandemic and escalating trade tensions between the US and China. The return of the Trump administration could reignite these challenges, but Fujikura has been preparing for such scenarios.
To mitigate risks, Iijima confirmed that the company has established a US-based production facility dedicated to manufacturing high-density optical fiber cables. The plant is designed to comply with the Build America Buy America Act, ensuring resilience “even if new issues arise that are disadvantageous to imported materials,” Iijima stated.
Looking ahead, Fujikura is preparing for emerging opportunities as global data center capacity is projected to grow by 33 percent annually through 2030, according to McKinsey & Company. The company is also exploring future markets, with nuclear fusion reactors – a potential clean energy breakthrough – seen as a promising avenue that will likely require extensive cabling solutions.
