Japan Technology: Hardware-Industrial Electronics optical fiber/cable: August trade data show a sharp optical-fiber/cable ASP surge, supporting Japan industrial-electronics fundamentals

Overview

This industry data update examines August Japanese Ministry of Finance trade statistics for optical fiber and cable. Goldman Sachs interprets the sharp rise in export ASPs as evidence that fundamentals for Japanese optical and industrial-electronics companies remain supported by global AI-infrastructure investment, even as the pace of spending may differ by region.

Core views

August Ministry of Finance data showed a meaningful improvement in optical-product export pricing. Optical-fiber cable export value increased 7% year-on-year, while optical-fiber export value, including some other optical-fiber cables, rose 140%. The more notable signal was average selling prices: optical-fiber cable ASP rose 143% year-on-year and optical-fiber ASP rose 112%. For all regions, optical-cable volume declined 56% year-on-year while value still rose 7%, consistent with the reported ASP increase; optical-fiber value rose 140% on volume growth of 13% and an ASP increase of 112%. The US was the principal destination in the data. It represented 58% of CY2025 optical-cable value and showed value growth of 53% year-on-year and 53% month-on-month; volume was down 7% year-on-year but up 50% month-on-month, while ASP increased 65% year-on-year. For optical fiber, the US accounted for 54% of CY2025 volume, with export value up 95% year-on-year, volume up 10%, and ASP up 78%. The report also notes year-on-year and month-on-month increases in US export value for both product categories. By customs jurisdiction, optical-cable export value rose year-on-year through Tokyo and Yokohama, locations linked to the main domestic manufacturing bases of Fujikura in Chiba, Sumitomo Electric in Yokohama, and Furukawa Electric in Mie. Goldman Sachs acknowledges investor concerns around generative-AI capital intensity, power shortages, LLM profitability and returns on invested capital, as well as opposition to US data-center development. Nevertheless, drawing on comments from Fujikura's September 25 CEO/CFO call, it expects global AI-infrastructure investment to trend upward even if its pace varies by country and region. The report therefore argues that companies should capture opportunities broadly rather than rely excessively on particular countries, regions or customers. At Fujikura, Goldman Sachs expects a greater contribution from higher-priced MMCs within high-margin optical connectors. At Furukawa Electric, it expects a full-scale launch of thermal water-cooling products from the second half, optical-cable price increases and mix improvement, plus higher volumes of optical devices including DFB lasers, SOAs and ITLAs. For Sumitomo Electric, the report sees potential for quarter-on-quarter earnings improvement as its optical-device plant recovers from a prolonged partial shutdown that weighed on first-quarter infocommunications results; it also considers the valuation attractive. SWCC is expected to benefit from expanding e-Ribbon communications-cable sales and a larger contribution from semiconductor-related probe pins, which Goldman Sachs believes could support a multiple re-rating. For Anritsu, the report notes that the shares have corrected since first-quarter results partly because of a high multiple, but says demand for optical-transceiver test equipment is stronger than expected. It also sees 6G as a potential topic in the company's new medium-term plan beginning next fiscal year. As related industry evidence, Ericsson announced a 6G technology-cooperation agreement with Sumitomo Electric and Murata Manufacturing on September 28. The report retains Buy ratings across the discussed companies. Its stated 12-month targets are ¥7,600 for Fujikura, ¥6,400 for Furukawa Electric, ¥3,300 for Sumitomo Electric Industries, ¥3,340 for SWCC, and ¥5,400 for Anritsu. These targets are based on FY3/28E EV/EBITDA multiples, with Sumitomo Electric using an SOTP approach. The valuation logic generally references correlations between EV/EBITDA and either EBITDA margin or EBITDA growth among domestic and global competitors.

Analysis framework

Goldman Sachs begins with Ministry of Finance export data, separating export value, volume and average selling price by product, destination and customs jurisdiction. It then connects pricing and export trends to manufacturing locations and company-specific product exposure, before assessing the AI-infrastructure demand backdrop and applying company-specific EV/EBITDA or SOTP valuation frameworks.

Methodology notes

• Industry AnalysisVolume-price decomposition

  Export value, volume and average selling price analysis

  The report separates changes in export value into volume and ASP movements to show that pricing, rather than volume alone, drove the strong optical-fiber and cable export performance.

• Valuation methodsEV/EBITDA valuation

  FY3/28E EV/EBITDA target multiples benchmarked against domestic and global competitors

  Goldman Sachs derives several company target prices by applying an EV/EBITDA multiple chosen with reference to observed relationships between valuation multiples and EBITDA margins or growth.

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Sum-of-the-parts approach for Sumitomo Electric Industries

  The report states that Sumitomo Electric's FY3/28E target EV/EBITDA valuation uses an SOTP approach, which values the company's component businesses separately.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Fujikura (5803.T)

  Beneficiary of higher-priced MMCs and optical-connector demand linked to AI infrastructure

  Strengths

  Goldman Sachs expects a higher weighting of higher-priced MMCs in high-margin optical connectors.

  Comparison

  Target EV/EBITDA multiple of 25.0x FY3/28E is based on EV/EBITDA and EBITDA-margin correlations across domestic and global competitors.

  Risks

  Delays in hyperscaler-investment benefits, telecom-carrier spending restraint, competitor catch-up in ultra-high-density cables, smartphone weakness, auto-volume shortfalls and FX swings.

• Furukawa Electric (5801.T)

  Beneficiary of thermal products, optical-cable pricing and mix improvement, and higher optical-device volumes

  Strengths

  Expected second-half launch of thermal water-cooling products and volume growth in DFB lasers, SOAs and ITLAs.

  Weaknesses

  Profit recovery depends on expansion of high-margin optical products and sustained competitiveness at FFOC.

  Comparison

  Target EV/EBITDA multiple of 20x FY3/28E is based on the relationship between EV/EBITDA and EBITDA growth among domestic and overseas competitors.

  Risks

  Slower generative-AI data-center investment, delayed data-center construction, weaker profitability at FFOC, cable-demand slowing, order delays and material-cost pass-through constraints.

• Sumitomo Electric Industries (5802.T)

  Potential beneficiary of optical-device plant recovery and improving infocommunications earnings

  Strengths

  Goldman Sachs expects quarter-on-quarter earnings improvement as a partial optical-device plant shutdown recovers; it also views valuation as attractive.

  Weaknesses

  Investor interest is described as somewhat low at present.

  Comparison

  The ¥3,300 target uses a 13.0x FY3/28E EV/EBITDA multiple and an SOTP approach.

  Risks

  Auto-production declines, slower material-cost pass-through, extended hyperscaler inventory adjustment, cable competition, project delays, weak clean-energy contributions, high material costs and FX fluctuations.

• SWCC (5805.T)

  Potential beneficiary of communications-cable sales and semiconductor-related probe-pin contribution

  Strengths

  Expected expansion of e-Ribbon communication-cable sales and a larger semiconductor-product contribution could support a multiple re-rating.

  Comparison

  The ¥3,340 target uses an 11.5x FY3/28E EV/EBITDA multiple based on global peer EBITDA-margin correlations.

  Risks

  Lower Japanese wire and cable prices, slower margin improvement, low-priced foreign cable competition, weak appliance or EV demand, auto-volume declines, copper-cost pass-through constraints, disappointing overseas-investment returns and yen appreciation.

• Anritsu (6754.T)

  Beneficiary of stronger-than-expected optical-transceiver test-equipment demand and potential 6G discussion

  Strengths

  Goldman Sachs says optical-transceiver test-equipment demand is stronger than expected and sees possible 6G discussion in the next medium-term plan.

  Weaknesses

  The stock has corrected since first-quarter results, partly due to its high multiple.

  Comparison

  The ¥5,400 target uses a 17x FY3/28E EV/EBITDA multiple based on global peer EBITDA-margin correlations.

  Risks

  Weak 5G application demand, tariff-related delays in customer decisions, a shift from full to sampling testing, market-share pressure, slower battery-test-equipment demand, disappointing M&A or growth-investment returns, higher R&D intensity and yen appreciation.

Key data

• Optical-fiber cable export value+7% yoyAugust Ministry of Finance data for all regions
• Optical-fiber export value+140% yoyIncludes some other optical-fiber cables
• Optical-fiber cable ASP+143% yoyAverage export price; +161% month-on-month
• Optical-fiber ASP+112% yoyAverage export price; +17% month-on-month
• US share of CY2025 optical-cable value58%Largest destination in the report's destination analysis
• US share of CY2025 optical-fiber volume54%Largest destination in the report's destination analysis

Impact & implications

The report views the export-price data as supportive of optical-product fundamentals and believes Japanese suppliers can benefit from continuing global AI-infrastructure buildout. It stresses that the opportunity is more resilient when companies diversify customer and geographic exposure, while company outcomes will depend on product mix, capacity recovery, pricing and the realization of data-center-related demand.

Risks

• Generative-AI infrastructure spending could slow because of data-center construction constraints, power limitations or deteriorating project profitability.
• Hyperscaler capex or telecom-carrier investment may be delayed or restrained, extending inventory adjustments and weakening optical demand.
• Low-cost cable competition, including from China and India, could pressure optical-fiber cable pricing and profitability.
• Automotive production weakness, material-cost inflation that cannot be passed through, and yen appreciation are recurring company-level risks.
• For Anritsu, weaker 5G demand, tariff-related delays in customer decisions and a shift toward sampling tests could restrain test-equipment sales.

What to watch

• Monthly export value, volume and ASP trends for optical fiber and optical-fiber cable, especially US demand.
• The pace and geographic breadth of global AI-infrastructure and hyperscaler investment.
• Fujikura's MMC mix, Furukawa Electric's thermal-product launch and optical-device volumes, and Sumitomo Electric's optical-device plant recovery.
• SWCC's e-Ribbon cable and probe-pin sales contribution.
• Anritsu's optical-transceiver test-equipment demand and whether 6G features in its next medium-term plan.