Japan Technology: Hardware-Industrial Electronics: Japan optical-fiber export pricing surged in August, reinforcing Goldman Sachs’ constructive view on cable and industrial-electronics fundamentals

Overview

This industry update uses August Japanese trade statistics to assess optical-fiber and cable demand and pricing. Goldman Sachs sees the data as evidence that the optical-infrastructure cycle remains constructive, while distinguishing company-specific execution opportunities and risks across Japanese hardware and industrial-electronics names.

Core views

The report centers on August trade statistics released by Japan’s Ministry of Finance on September 29. Optical-fiber cable export value rose 7% year-on-year, while optical-fiber export value, including certain other optical-fiber cables, rose 140%. The more important signal was pricing: average selling prices increased 143% year-on-year for optical-fiber cable and 112% for optical fiber. Goldman Sachs interprets the sharp ASP gains as support for favorable fundamentals in optical products rather than a purely volume-led recovery. Export-market data reinforced the importance of the United States. For optical cable, the US represented 58% of CY2025 export value and August export value rose 53% year-on-year and 53% month-on-month; ASP rose 65% year-on-year. For optical fiber, the US represented 54% of CY2025 export volume, with export value up 95% year-on-year and 40% month-on-month and ASP up 78% year-on-year. The report also notes year-on-year growth in exports to the US for both product categories. By customs jurisdiction, optical-cable export value increased year-on-year through Tokyo and Yokohama, locations connected to major domestic cable manufacturers’ manufacturing bases. Goldman Sachs acknowledges investor concerns over the durability of AI spending, including large generative-AI capital outlays, power constraints, the profitability and ROIC of large language models, and opposition to US data centers. Nevertheless, based partly on comments from Fujikura’s September 25 CEO/CFO call, it expects global AI-infrastructure investment to trend upward even if its pace fluctuates across countries and regions. The report argues that suppliers should capture opportunities broadly across geographies and customers rather than rely excessively on a particular market or client. For Fujikura, the report expects a larger weighting of higher-priced MMCs within high-margin optical connectors. For Furukawa Electric, it expects a full-scale launch of thermal water-cooling products from the second half, optical-cable price increases and mix improvement, and higher volumes of optical devices including DFB lasers, SOAs and ITLAs. For Sumitomo Electric Industries, Goldman Sachs sees potential for quarter-on-quarter earnings improvement as its optical-device operations recover from a prolonged partial plant shutdown that had weakened first-quarter infocommunications results; it also considers the valuation attractive. For SWCC, Goldman Sachs expects expanding communication-cable sales, including e-Ribbon, plus a greater contribution from semiconductor-related probe pins, creating scope for a valuation multiple re-rating. Anritsu’s shares have corrected since first-quarter results partly because of its high multiple, but the report says demand for optical-transceiver test equipment appears stronger than expected. It also points to potential discussion of 6G in Anritsu’s next medium-term plan, following Ericsson’s September 28 technology-cooperation agreement with Sumitomo Electric and Murata Manufacturing. The report retains Buy ratings and presents 12-month valuation targets based primarily on FY3/28E EV/EBITDA. Fujikura’s ¥7,600 target uses 25.0x EV/EBITDA; Furukawa Electric’s ¥6,400 target uses 20.0x; SWCC’s ¥3,340 target uses 11.5x; and Anritsu’s ¥5,400 target uses 17.0x. Sumitomo Electric Industries’ ¥3,300 target uses 13.0x FY3/28E EV/EBITDA through an SOTP approach. The selected multiples are linked to correlations between valuation, EBITDA margin or EBITDA growth and domestic or global competitors.

Analysis framework

Goldman Sachs starts with Ministry of Finance export data, separating export value, volume and ASP by destination and customs jurisdiction. It then connects pricing and demand signals to company manufacturing exposure, AI and data-center investment trends, product mix, operational recovery and company-specific valuation frameworks.

Methodology notes

• Industry AnalysisVolume-price decomposition

  Analysis of export value, export volume and average selling prices for optical fiber and cable.

  The report separates price from volume movements to argue that the August improvement was strongly supported by ASP increases.

• Valuation methodsEV/EBITDA valuation

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

  Goldman Sachs derives most company target prices using EV/EBITDA multiples linked to peer correlations with EBITDA margins or growth.

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

  Sum-of-the-parts valuation for Sumitomo Electric Industries.

  The report applies a 13.0x FY3/28E EV/EBITDA target within an SOTP approach for the diversified company.

Asset mapping & comparison

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

• Fujikura (5803.T)

  Beneficiary of higher-value optical connectors and broad AI-infrastructure investment.

  Strengths

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

  Comparison

  Its target multiple reflects EV/EBITDA and EBITDA-margin correlations across domestic and global competitors.

  Risks

  Delayed hyperscaler benefits, restrained telecom investment, intensified optical-cable competition, smartphone weakness, weaker auto production and foreign-exchange swings.

• Furukawa Electric (5801.T)

  Beneficiary of data-center optical products, thermal water-cooling products and optical-device volume growth.

  Strengths

  Expected second-half thermal-product launch, cable price increases and mix improvement, and higher DFB laser, SOA and ITLA volumes.

  Comparison

  Its 20.0x FY3/28E EV/EBITDA multiple is based on peer valuation and EBITDA-growth correlations.

  Risks

  Slower data-center optical-product expansion, renewed FFOC profitability weakness, slower generative-AI investment, cable-demand slowdown, unfilled HVDC capacity, weaker auto demand and material-cost pressure.

• Sumitomo Electric Industries (5802.T)

  Potential beneficiary of optical-device operational recovery and improving infocommunications earnings.

  Strengths

  Goldman Sachs expects quarter-on-quarter earnings improvement following recovery from a partial optical-device plant shutdown and considers valuation attractive.

  Weaknesses

  Investor interest was described as somewhat low at present.

  Comparison

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

  Risks

  Lower auto production, slower cost pass-through, prolonged hyperscaler inventory adjustments, optical-cable competition, delays in power-infrastructure projects, energy-cost increases and FX fluctuations.

• SWCC (5805.T)

  Potential beneficiary of communication-cable growth and semiconductor-related probe-pin contributions.

  Strengths

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

  Comparison

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

  Risks

  Lower domestic wire and cable pricing, slower margin improvement, low-cost imported cable competition, slower EV adoption, weaker auto production, copper-cost pressure, weak investment returns and yen appreciation.

• Anritsu (6754.T)

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

  Strengths

  Optical-transceiver test-equipment demand appears stronger than expected; 6G may feature in the next medium-term plan.

  Weaknesses

  The stock had corrected after first-quarter results partly because of its high multiple.

  Comparison

  The ¥5,400 target uses 17.0x FY3/28E EV/EBITDA based on global-peer margin correlations.

  Risks

  Weak 5G application demand, tariff-related delays in data-center customer decisions, a shift toward sampling tests, PQA share loss, slower battery-test demand, weak M&A returns, higher R&D intensity and yen appreciation.

Key data

• Optical-fiber cable export value+7% YoYAugust growth in export value.
• Optical-fiber export value+140% YoYIncludes some other optical-fiber cables.
• Optical-fiber cable ASP+143% YoYAugust average selling-price increase.
• Optical-fiber ASP+112% YoYAugust average selling-price increase.
• US share of CY2025 optical-cable exports58%Based on export value.
• US share of CY2025 optical-fiber exports54%Based on export volume.

Impact & implications

The report views higher optical-product ASPs and continued US demand as evidence supporting a constructive outlook for Japanese suppliers to data-center and AI infrastructure. It identifies differentiated product mix, thermal-management products, optical-device volumes, operational recovery and test-equipment demand as the principal company-level channels through which this backdrop could affect earnings and valuation.

Risks

• AI and hyperscaler capital expenditure could slow because of construction bottlenecks, power constraints or deteriorating project economics.
• Competition in ultra-high-density optical-fiber cables and low-cost supply could pressure selling prices and profitability.
• Automotive-production shortfalls, material-cost inflation and inability to pass costs through could weaken earnings for exposed suppliers.
• Foreign-exchange movements, especially yen appreciation, are identified as company-wide risks for several covered names.
• Data-center customer decisions may be delayed by US tariff uncertainty, affecting Anritsu’s demand outlook.

What to watch

• Monthly optical-fiber and cable export value, volume and ASP trends, particularly demand from the United States.
• The geographic and customer breadth of global AI-infrastructure investment.
• Fujikura’s mix shift toward higher-priced MMC optical connectors.
• Furukawa Electric’s second-half thermal-product launch, optical-cable pricing and optical-device volumes.
• Sumitomo Electric’s recovery from the partial optical-device plant shutdown and resulting quarter-on-quarter earnings progression.
• SWCC’s e-Ribbon and probe-pin sales contribution, and Anritsu’s optical-transceiver testing demand and next medium-term plan.