Fujikura Pivots from China to Hyperscalers as AI Fiber Orders Override Patent Setback

Despite selling its China JV and losing a key European patent, Fujikura's stock rallies 26.8% on AI data center demand, with plans to triple capacity in Japan and US.

Fujikura is exiting China just as a European patent defeat might have complicated its European ambitions — yet the market is brushing off both developments in favor of a far bigger story. Over the past 30 days, the Japanese cable and fiber specialist has seen its shares rally 26.81 percent, closing at €28.29 on Friday, up 2.46 percent on the day. That near-term strength masks a bumpy week, however, with the stock still down 2.87 percent over the five sessions.

What triggered the week’s turbulence was a double dose of corporate news. On one hand, the company agreed to sell its entire 60 percent stake in the Wuhan-based Fujikura FiberHome Opto-Electronics Material Technology joint venture to partner FiberHome Telecommunication Technologies. The deal is valued at approximately 500 million renminbi (around ¥12 billion) and removes the unit from Fujikura’s consolidation perimeter. Both sides say the venture had fulfilled its original purpose. On the other, the Board of Appeal of the European Patent Office issued a final, non-appealable ruling on July 10, revoking Fujikura’s patent EP 3796060 in its entirety. The patent covered high-density fiber-optic connection solutions — a core growth area — and the loss opens the door for rival Sterlite Technologies in Europe and also tilts a parallel UK case in the Indian competitor’s favor.

Yet the patent blow barely dented investor sentiment. Market observers see the real value driver elsewhere: the almost insatiable demand for fiber connectivity in AI-powered data centers. Fujikura has reportedly locked in orders from nearly every major U.S. hyperscaler for its specialized cables — a product essential for linking high-performance GPUs in AI clusters. That order pipeline prompted analysts to lift their profit forecasts for the fiscal year 2027, fueling the stock’s rally even as the 14-day Relative Strength Index, now at a neutral 47.8, suggests the earlier overbought conditions have eased.

The China exit is a deliberate step in that same direction. Proceeds from the Wuhan sale will be redeployed into Fujikura’s core strategy: expanding capacity for premium interconnect products aimed at hyperscale data centers in North America and Japan. Management plans to triple production capacity at home and in the United States, with investments that could reach ¥300 billion depending on market evolution. A new factory in Sakura, Chiba Prefecture, is already on the drawing board to churn out next-generation fiber and cable. For the Japanese data-center market specifically, Fujikura has launched a 4,000-fiber cable series under the Spider Web Ribbon and Wrapping Tube Cable brands — designed to pack more fibers into standard conduit as generative AI and cloud services explode data traffic.

The stock remains a wild ride for investors. Annualized 30-day volatility stands at 128.78 percent, and with a market capitalization of roughly €43 billion, Fujikura commands a hefty valuation for a company still navigating legal and operational shifts. But the market’s message this week was clear: the patent loss and the Chinese JV departure are speed bumps, not roadblocks, on a path that runs straight through the AI infrastructure boom. The key question now is how quickly Fujikura can scale its proprietary SWR and WTC technologies to meet the next wave of data-center construction.