Fujikura increases prices for AI data centre cables due to tightening supply.

      TL;DR: Fujikura is increasing prices for fibre-optic cables as nearly all US hyperscalers place orders amid tight supply. The CEO claims the company will surpass its forecasts, even though its shares have plummeted 40% since their peak in May.

      Fujikura, a fibre-optic cable producer based in Tokyo, is raising prices on the cables that link servers in AI data centres. CEO Naoki Okada stated to Bloomberg that the firm is set to exceed its own predictions due to ongoing demand from nearly every significant US hyperscaler. "We provide a valuable product," Okada remarked. "We will raise prices a bit more."

      Why cables are a limitation

      AI data centres require significantly more fibre-optic cable than standard cloud facilities. The slender glass strands carry data through light pulses between GPUs, and the high volume of data generated during AI training and inference has turned cabling into a structural bottleneck, limiting how quickly new clusters can be launched.

      Fujikura, together with Japan's Sumitomo Electric and Furukawa Electric, leads the high-end segment of this market. The supply crunch has granted them pricing power that few suppliers in the AI ecosystem possess.

      The Meta and Nvidia indication

      US competitor Corning sealed a $6 billion supply agreement with Meta and a separate $500 million stock deal with Nvidia. These agreements, announced in recent months, show that hyperscalers consider fibre-optic supply essential enough to secure years of capacity at premium rates.

      Okada indicated that Fujikura is receiving orders from nearly all US hyperscalers. Some clients have already consented to higher prices for the company's key products, although Okada did not specify which clients or reveal the size of the price hikes.

      The stock decline

      Fujikura’s shares have fallen over 40% from a peak reached in May. This decline was prompted by annual and three-year profit forecasts that significantly missed analyst expectations, raising concerns about production capacity constraints, increasing competition, and supply chain issues.

      Okada mentioned that the forecast was intentionally cautious and accounted for worst-case scenarios, including potential hydrogen shortages, which are necessary for manufacturing fibre-optic preforms, the glass rods used to create cables. "There is no way we will miss our annual forecast," he asserted.

      The silent winners in the AI infrastructure supply chain

      While chip manufacturers like Nvidia and memory firms like SK Hynix are the most apparent beneficiaries of the AI expansion, the physical layer—cables, connectors, cooling systems, and power distribution—has some of the tightest constraints.

      Fujikura's ability to increase prices amid a 40% drop in its stock value tells a particular story: there is real demand, but the market doubts the company's capacity to scale operations quickly enough to realize it. If Okada's price increases and plans for optical component expansion succeed, "the results will be very positive," he said. The difference between that optimism and the stock price is where the opportunity lies.