Japan Technology: Hardware-Industrial Electronics—optical fiber and cable: August export data show sharply higher optical-fiber and cable ASPs, supporting Goldman Sachs' constructive view of Japan's hardware and industrial-electronics suppliers.

Overview

Goldman Sachs reviews August Japanese Ministry of Finance trade data for optical fiber and cable. The central finding is that sharp average-selling-price increases, alongside strong optical-fiber export growth and continued US demand, support the underlying outlook for Japanese hardware and industrial-electronics companies exposed to AI and data-center infrastructure.

Core views

The August Ministry of Finance trade statistics showed a marked improvement in pricing for Japanese optical products. Optical-fiber cable export value grew 7% year-on-year, while optical-fiber export value rose 140%. The report attributes the strength primarily to pricing: optical-fiber cable ASP increased 143% year-on-year and optical-fiber ASP increased 112% year-on-year. For all regions, cable export volume fell 56% year-on-year even as value rose, underscoring the role of ASPs; optical-fiber volume grew 13% year-on-year, alongside 140% value growth and 112% ASP growth. The United States remained central to the data. It represented 58% of CY2025 optical-cable export value and 54% of optical-fiber export volume on the report's stated basis. In August, US optical-cable export value was up 53% year-on-year and 53% month-on-month, with volume down 7% year-on-year but up 50% month-on-month and ASP up 65% year-on-year. US optical-fiber export value rose 95% year-on-year and 40% month-on-month; volume increased 10% year-on-year and 35% month-on-month, while ASP rose 78% year-on-year. By customs jurisdiction, cable export value increased year-on-year at Tokyo and Yokohama, consistent with the locations of Fujikura's Chiba production base and Sumitomo Electric's Yokohama base; Furukawa Electric's Mie base is associated with Nagoya customs. The report acknowledges investor concerns over the scale and returns of generative-AI capital spending, power shortages, large-language-model profitability and opposition to data centers in the United States. Nevertheless, Goldman Sachs argues that global AI-infrastructure investment is likely to trend upward, albeit at different speeds across countries and regions. Its resulting strategic conclusion is that suppliers should capture opportunities across a broad geographic and customer base rather than depend excessively on a particular market, region or customer. For Fujikura, Goldman Sachs expects a larger contribution from higher-priced MMCs within high-margin optical connectors. It maintains a Buy rating and a 12-month ¥7,600 target price based on 25.0x FY3/28E EV/EBITDA, with the multiple linked to the relationship between EV/EBITDA and EBITDA margin among domestic and global competitors. Key risks include delayed hyperscaler-investment benefits, prolonged telecom-carrier spending restraint, competitors catching up in ultra-high-density optical cable, weaker smartphones, intensified electronics competition, lower automobile production and foreign-exchange moves. For Furukawa Electric, the report expects a full-scale launch of thermal water-cooling products from 2H, optical-cable price increases and mix improvement, and higher volumes of optical devices including DFB lasers, SOAs and ITLAs. Goldman Sachs is Buy rated with a ¥6,400 12-month target, applying 20x FY3/28E EV/EBITDA based on the relationship between competitor EV/EBITDA multiples and EBITDA growth. Risks include slower high-margin data-center optical-product expansion, renewed deterioration at acquired Furukawa FITEL Optical Components, slower generative-AI data-center investment, weaker cable demand, unfulfilled HVDC orders, weaker automotive volumes, inability to pass through material costs, and delayed gains in copper foil, thermal products or semiconductor-manufacturing tape. For Sumitomo Electric Industries, Goldman Sachs sees potential for quarter-on-quarter earnings improvement as part of an optical-device plant recovers from a prolonged shutdown that weakened the infocommunications business in the first quarter. The report believes its valuation looks attractive despite currently subdued investor interest. It maintains Buy and a ¥3,300 12-month target, using a 13.0x FY3/28E EV/EBITDA target multiple within an SOTP approach. Risks span lower vehicle production, delayed material-cost pass-through, longer hyperscaler inventory adjustments, competitive catch-up in optical cable, delays to power-infrastructure projects, slower clean-energy earnings contributions, weaker industrial demand, higher energy costs, FX fluctuations and persistently high material prices. For SWCC, Goldman Sachs expects expanded communication-cable sales, particularly e-Ribbon, and a greater semiconductor-related contribution from probe pins; it sees scope for a multiple re-rating if these developments progress. The firm is Buy rated with a ¥3,340 12-month target based on 11.5x FY3/28E EV/EBITDA, using the relationship between global-peer multiples and EBITDA margin. Principal risks include normalized Japanese supply-demand for wire, cable and power equipment causing lower prices; weaker margin improvement; inexpensive overseas optical-cable supply; slower EV adoption and vehicle production; copper-cost pass-through constraints; disappointing returns from growth investment; and yen appreciation. 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 believes 6G could feature in the company's next medium-term plan, beginning next fiscal year; Ericsson's September 28 technology-cooperation agreement with Sumitomo Electric and Murata Manufacturing is cited as relevant context. Goldman Sachs is Buy rated with a ¥5,400 12-month target based on 17x FY3/28E EV/EBITDA, derived from the global-peer EV/EBITDA-to-EBITDA-margin relationship. Risks include cooling 5G applications, tariff-related uncertainty delaying data-center customer decisions, a shift from 100% testing to sampling, weaker PQA expansion, disappointing battery-test-equipment demand if BEV growth slows, lower M&A or growth-investment returns, higher R&D intensity and yen appreciation.

Analysis framework

Goldman Sachs first uses Ministry of Finance export value, volume and ASP data to assess optical-fiber and cable demand and pricing by destination and customs jurisdiction. It then connects the trade trends to AI-infrastructure investment and evaluates company-specific operating exposures. Target prices are supported by FY3/28E EV/EBITDA multiples benchmarked against domestic or global peers; Sumitomo Electric Industries additionally uses a sum-of-the-parts approach.

Methodology notes

• Industry AnalysisVolume-price decomposition

  Export value, volume and average selling price analysis for optical fiber and cable.

  The report separates changes in export value into volume and ASP movements to show that sharp pricing gains were the main driver of cable export-value growth.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  AI data-center infrastructure investment transmitted into demand for cables, optical components, cooling products and test equipment.

  Goldman Sachs links AI-infrastructure spending and hyperscaler activity to product demand and earnings opportunities for Japanese suppliers across the optical and electronics chain.

• Valuation methodsEV/EBITDA valuation

  FY3/28E EV/EBITDA target multiples benchmarked against peer relationships with EBITDA margin or growth.

  The firm derives most stated target prices by applying an EV/EBITDA multiple to FY3/28E estimates, with peer comparisons informing the selected multiple.

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

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

  The report explicitly states that Sumitomo Electric's 13.0x FY3/28E EV/EBITDA target multiple is used within an SOTP approach.

Asset mapping & comparison

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

• Fujikura (5803.T)

  Covered beneficiary of higher-value optical connectors and AI-infrastructure demand.

  Strengths

  Expected higher weighting of higher-priced MMCs in high-margin optical connectors.

  Weaknesses

  Exposure to smartphones and automotive production.

  Comparison

  Target multiple is based on the EV/EBITDA and EBITDA-margin correlation across domestic and global competitors.

  Risks

  Delayed hyperscaler investment, telecom spending restraint, optical-cable competition and FX swings.

• Furukawa Electric (5801.T)

  Covered beneficiary of optical-cable pricing and mix, thermal water-cooling products, and optical devices.

  Strengths

  Expected 2H thermal-product launch, cable price hikes and mix improvement, and higher DFB laser, SOA and ITLA volumes.

  Weaknesses

  Execution and profitability exposure at acquired FFOC; dependence on data-center investment and customer adoption.

  Comparison

  20x FY3/28E EV/EBITDA target multiple reflects peer multiple-to-EBITDA-growth correlation.

  Risks

  Slower AI-data-center spending, weaker cable demand, cost pass-through pressure, and delayed thermal or semiconductor-tape growth.

• Sumitomo Electric Industries (5802.T)

  Covered optical-device and infrastructure supplier expected to see earnings recovery after a plant shutdown.

  Strengths

  Potential quarter-on-quarter earnings improvement and valuation viewed as attractive by the report.

  Weaknesses

  First-quarter infocommunications weakness was affected by a prolonged partial optical-device plant shutdown.

  Comparison

  13.0x FY3/28E EV/EBITDA target multiple is used in an SOTP approach.

  Risks

  Hyperscaler inventory adjustment, cable competition, automotive weakness, project delays, material costs and FX.

• SWCC (5805.T)

  Covered beneficiary of e-Ribbon communication cables and semiconductor-related probe pins.

  Strengths

  Expected sales expansion in communication cables and a larger semiconductor-product contribution; scope for a multiple re-rating.

  Weaknesses

  Margin sensitivity to domestic cable supply-demand, construction efficiency and material costs.

  Comparison

  11.5x FY3/28E EV/EBITDA target multiple is based on the global-peer EV/EBITDA-to-EBITDA-margin relationship.

  Risks

  Lower cable prices, cheap imported optical cable, slower EV transition, copper inflation and weak investment returns.

• Anritsu (6754.T)

  Covered test-equipment supplier linked to optical transceivers, 5G/6G and battery testing.

  Strengths

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

  Weaknesses

  The report notes the stock corrected after first-quarter results partly because of its high multiple.

  Comparison

  17x FY3/28E EV/EBITDA target multiple is based on the global-peer multiple-to-EBITDA-margin relationship.

  Risks

  Cooling 5G demand, tariff-related data-center uncertainty, changes in testing practices, weaker BEV demand and yen appreciation.

Key data

• Optical-fiber cable export value+7% year-on-yearAugust Ministry of Finance data.
• Optical-fiber export value+140% year-on-yearAugust Ministry of Finance data; includes some other optical-fiber cables.
• Optical-fiber cable ASP+143% year-on-yearSharp price increase despite all-region volume falling 56% year-on-year.
• Optical-fiber ASP+112% year-on-yearAll-region export volume increased 13% year-on-year.
• US optical-cable export value+53% year-on-year; +53% month-on-monthThe US represented 58% of CY2025 optical-cable export value on the report's stated basis.
• US optical-fiber export value+95% year-on-year; +40% month-on-monthThe US represented 54% of CY2025 optical-fiber export volume on the report's stated basis.
• Fujikura target price¥7,60012-month target; 25.0x FY3/28E EV/EBITDA.
• Furukawa Electric target price¥6,40012-month target; 20x FY3/28E EV/EBITDA.
• Sumitomo Electric Industries target price¥3,30012-month target; 13.0x FY3/28E EV/EBITDA using SOTP.
• SWCC target price¥3,34012-month target; 11.5x FY3/28E EV/EBITDA.
• Anritsu target price¥5,40012-month target; 17x FY3/28E EV/EBITDA.

Impact & implications

The report interprets the August pricing and export data as evidence that optical-infrastructure fundamentals remain supportive. It expects different benefits across covered companies—from high-margin connectors and optical devices to cooling, cables, probe pins and optical-transceiver testing—while emphasizing that AI-infrastructure spending may be uneven across markets and customers.

Risks

• Generative-AI infrastructure investment could slow because of large capital outlays, power constraints, data-center construction bottlenecks or weaker project profitability.
• The pace of AI investment may fluctuate materially by country, region and customer.
• Optical-cable pricing and margins could be pressured by lower-cost competitors or a normalization of supply and demand.
• Automotive production, EV adoption, material-cost pass-through and foreign-exchange movements are recurring company-specific risks.
• Data-center customer decisions could slow amid US tariff uncertainty, while changes from full testing to sampling could reduce test-equipment demand.

What to watch

• Future Ministry of Finance data on optical-fiber and cable export value, volume and ASPs, particularly for US shipments.
• The pace and geographic breadth of AI-infrastructure and hyperscaler investment.
• Fujikura's mix shift toward higher-priced MMC optical connectors.
• Furukawa Electric's second-half thermal water-cooling launch, optical-cable price and mix trends, and optical-device volumes.
• Sumitomo Electric's recovery from the partial optical-device plant shutdown and resulting quarterly infocommunications earnings.
• SWCC's e-Ribbon cable and probe-pin sales progression.
• Anritsu's optical-transceiver test-equipment demand and any 6G discussion in its next medium-term plan.