Furukawa Electric - Company History

In June 1896 the Furukawa zaibatsu founded Yokohama Densen Seizo for a plainly industrial reason: the Ashio mine produced copper, and copper needed somewhere to go. The company bought metal from Furukawa Mining and drew it into wire for the telegraph and power utilities — vertical integration from the outset. In April 1920 it took over the Nikko electrolytic copper works and renamed itself Furukawa Electric, joining refining and cable-making in one firm.

The mine that paid for all this was also the source of Japan’s first great pollution disaster, and the compensation and remediation along the Watarase river stayed with the Furukawa family for decades. Expansion and social cost came out of the same hole in the ground.

Everything new, meanwhile, was pushed outside the company. A storage-battery plant was added in 1914; a tie-up with Goodrich produced Yokohama Rubber as a separate firm in 1917; a capital and technology alliance with Siemens created Fuji Denki in 1923 — which would in turn spin off the telephone-equipment business that became Fujitsu — and an alliance with Tokyo Electric Light produced Nippon Light Metal. The pattern set the shape of the group and of the parent: a widening constellation of affiliates, and a core that remained a wire company.

Furukawa Electric listed in Tokyo in May 1949 and spun the battery division off as Furukawa Battery in September 1950 — a subsidiary it would own for the next seventy-five years. New plants followed the growth of the economy: Hiratsuka in 1958, Chiba in 1961, Mie in 1971. Copper wire, power cable, batteries, automotive components and communications cable made it the non-ferrous arm of the Furukawa group and a supplier to the country’s power and telephone build-out.

Diversification continued to run outward rather than inward. Nippon Zeon was created with Goodrich in 1950, and magnesium, chemicals, special metals and — with Alcoa in 1959 — aluminium each got their own company. The method worked for the group and left the parent narrow: as late as the year to March 1955, cable and wire still accounted for 62.3% of Furukawa Electric’s ¥6.89bn of sales.

The seed of the next fifty years was planted quietly in this period. Optical-fibre research ran through the 1970s, a dedicated Yokohama research laboratory opened in February 1987, and in 1990 the company took a stake in a North American optical-component joint venture that became JDS Uniphase. None of it was visible next to the wire business — until the stake was suddenly worth more than the company itself.

By 2000 the internet boom had turned the JDS Uniphase holding into a paper gain reported at around ¥2 trillion — more than Furukawa Electric’s own market capitalization. Furukawa Junnosuke, the fifth head of the founding family, had become president in 1995 convinced that fibre was the successor to copper, and in November 2001 he bought Lucent Technologies’ optical fibre and cable business, OFS. Furukawa’s share of the roughly $2.7bn sale came to about $2bn, or ¥225bn, funded by ¥110bn of JDS share sales and ¥90bn of bank debt. It would take the world number-two position behind Corning.

The bubble broke almost immediately. OFS revenue collapsed, and Furukawa Electric reported net losses of ¥114.0bn in the year to March 2003 and ¥140.1bn in the year to March 2004, with ¥91.0bn of interest-bearing debt from the deal. Furukawa Junnosuke stepped up to chairman in 2003, taking responsibility. For twenty years afterwards the acquisition defined how the market saw the company.

What followed was subtraction. The aluminium business was split off as Furukawa-Sky in 2003, the power business transferred to VISCAS in 2005. The 2008 crash brought another ¥37.4bn loss, and in the year to March 2012 a ¥15.2bn US antitrust penalty over bid-rigging in automotive wire harnesses — with three employees jailed in the United States — landed on top of the debt. Restructuring stopped being a programme and became the permanent condition of the company.

The 2010s were spent unwinding the constellation the zaibatsu era had built. Furukawa-Sky merged with Sumitomo Light Metal to become UACJ in 2013 and moved to equity-method status; the copper tube business was carved out and sold in 2020; heavy magnet wire went into Essex Furukawa; Tokyo Tokushu Densen (TOTOKU) was sold to Carlyle in December 2022 for an estimated ¥15.3bn gain. Last to go was Furukawa Battery, spun off in 1950 and listed in 1972 — sold, seventy-five years on, once a single return-on-invested-capital yardstick was applied across the whole group. Meanwhile the surviving businesses struggled: automotive electronics operating profit fell to ¥100m in the year to March 2022, and the infrastructure segment posted a ¥11.2bn operating loss in the year to March 2024.

The point of the selling was not to shrink but to fund one thing. The optical fibre patents and manufacturing know-how inherited from Lucent in 2001 had been carried, unprofitably and unremarked, for two decades — and generative AI made data-centre optics the fastest-growing market in the industry. Morihira Hideya, who became president in April 2023, reframed the business in exactly those terms, and in April 2025 the fibre and cable operations were reorganized as Lightera, with the proceeds of the divestitures going into liquid cooling and co-packaged optics capacity.

It is an unusual resolution. The acquisition recorded as the great failure of Japanese corporate history in the 2000s became, by virtue of never having been sold, the asset the company is now built around — data-centre products already exceed 30% of information and communications solutions revenue. Whether that is vindication or merely a very long wait depends on margins the company has yet to earn.