Furukawa Electric: long-term performance & turning pointsSales (revenue) and profit-margin ratio
Sales (¥ bn)Net margin (%)
1896An outlet for Ashio copper
Revenue (¥ bn, bars) · net margin (%, line)
Source: securities reports
1896Yokohama Densen Seizo founded to process Ashio copper
1917Yokohama Rubber founded with Goodrich
1920Nikko copper refinery acquired; renamed Furukawa Electric
1923Fuji Denki founded with Siemens
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.
1950Furukawa Battery spun off; Nippon Zeon founded
1981Furukawa Metals absorbed
1987Yokohama research laboratory opens
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.
2001Acquires Lucent’s OFS optical fibre business for ~¥225bn
2003Net loss of ¥114.0bn; aluminium split off as Furukawa-Sky
2004Second consecutive net loss, ¥140.1bn
2009Net loss of ¥37.4bn after the financial crisis
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.
2013Furukawa-Sky becomes UACJ; aluminium moved to equity method
2020Copper tube sold; magnet wire moved into Essex Furukawa
2022TOTOKU sold to Carlyle
2023Morihira Hideya becomes president
2025Optical fibre reorganized as Lightera
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.
What the mining king’s vertical integration left behind
What this founding shows is a decision of vertical integration — capital earned in mining turned toward downstream processing. To secure a reliable outlet for the electrolytic copper of the Ashio mine, its own resource, Furukawa Ichibei took a fabricating operation, cable manufacture, inside the group. In choosing not the glamour of finished goods but the wire that carries electricity — the foundation of an industry — one can read the calculation of a businessman taking a step beyond mining. The posture of binding extraction, smelting and fabrication into a single chain prepared the path to the non-ferrous metals maker that came later.
The other thing that comes into view is the double aspect of Ashio, the group’s core asset and at the same time the source of severe pollution. While the earnings of Japan’s largest copper mine underwrote the move into cable, the poisoning of the Watarase river basin left the Furukawa family with decades of compensation and remediation. That the expansion of the business and its social cost came out of the same mine reflects the contradiction built into modern Japan’s resource development. The mining king’s vertical integration handed on to the Furukawa that followed both a new business in cable and a heavy burden.
It did not build the business — it built a company
The road of starting heavy electrical machinery as a division of its own was not taken. What Furukawa Electric did instead was erect a separate company with ¥10m of capital, holding 70,000 of its 200,000 shares itself, giving 60,000 to Siemens and leaving the rest to public subscription. Technology and patents were brought in wholesale from outside, and management was entrusted to Natori Wasaku, a man from beyond the company. The post-war recession of the early 1920s, which left neither Furukawa Gomei nor Furukawa Electric able to put up the money alone, appears to have produced, as a result, a company open to outside capital and outside people.
Yet this way of building left little of the fruit with Furukawa Electric itself. In 1935 Fuji Denki let go of its telecommunications division as Fuji Tsushinki Seizo, which became Fujitsu. Nippon Light Metal in 1939 and Nippon Zeon in 1950 were born by the same procedure, and each grew up as a company separate from the parent. Of Furukawa Electric’s ¥6.89bn of sales in the year to March 1955, 62.3% was still wire and cable. The habit of putting new businesses outside left the core, one could say, a wire company.
Buy on collateral that has risen; pay after it has fallen
The unrealized gain on the JDS Uniphase shares, spoken of as some ¥2 trillion, had fallen to ¥500bn, and then to around ¥150bn, before the contract was even signed. A purchase decided on the strength of a stock that had risen was paid for after it had fallen. Furukawa Junnosuke said he had “decided on the acquisition reading three to five years ahead,” and had American optical fibre demand indeed returned within three to five years as he read it, the arithmetic would have worked. It took more than ten years to return, and that gap showed up as net losses exceeding ¥250bn over two years.
Even so, one cannot flatly say the asset itself was the error. Lucent’s roughly 900 patents and the licence to Corning’s patents were not lost, and the business carried at a loss for more than twenty years was reorganized into Lightera in 2025, now supporting data-centre products that account for over 30% of information and communications solutions revenue. Had it been let go, that harvest would have belonged to someone else. The outline of this decision lies in the way a judgement recorded as a failed acquisition came to be assessed differently through the years of simply not selling.
Until a business held for twenty years came back to the centre
The order of the disposals followed a rule inversely proportional to the age of the affiliation. Copper tube, magnet wire and Tokyo Tokushu Densen were peeled off from the outside in, and what remained until last was Furukawa Battery — separated out by the company itself in 1950 and listed in 1972. The decision to sell shares in a subsidiary held for seventy-five years appears to have become possible only once a single yardstick, return on invested capital, was run through the whole company. It is an example of how a decision that looks unremarkable from outside — swapping one metric for another — can have the power to change the cast of businesses.
What the money was concentrated on, though, was not a newly purchased business. Optical fibre and optical components for data centres are an extension of the assets inherited from Lucent in the OFS acquisition of 2001. Much of the proceeds of the sales went into expanding output at a business carried at a loss for more than twenty years. Including the design that retained roughly 20% of Furukawa Battery indirectly, this judgement rearranged the balance between what to cut and what to keep holding. Whether the escape from operating margins in the 1% range continues cannot be known without looking beyond the forecast for the year to March 2026.
Each heading links to the full Japanese analysis — background, decision and outcome, with sources.
This is a condensed English edition. The full, source-by-source history — with the detailed narrative, financial tables, shareholders and executives — is maintained in Japanese: 日本語版（詳細）— Furukawa Electric full history in Japanese →
Furukawa Electric Co., Ltd. — 有価証券報告書 (annual securities reports).
Histories of Enterprises: A Century of Meiji — 『企業の歴史 : 明治百年』, Keizai Shunjusha, 1968.
Nikkei Business — 日経ビジネス (Nikkei BP), 8 Oct 2001 (Furukawa Junnosuke on the optical bet).
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