Company history

Sumitomo had made its fortune modernising the Besshi copper mine, and by the 1890s it held everything in the chain except the part that turned refined metal into a product. In 1897 the Sumitomo head office bought the failing Nippon Seido and opened the Sumitomo Copper Rolling Works in Kita-ku, Osaka, making rolled-copper goods and — as one line among them — bare copper wire. Sheet and rod on one side, wire and cable on the other, under a single roof: that proximity of material to fabrication set the shape of everything the company would later become. Insulated wire followed in 1900, a first telecommunications cable in 1909.

In 1911 the wire business was cut out as a separate works, Sumitomo Densen Seizosho — not because it was thriving but because it was not. It went independent of the head office in 1920 with capital of ¥10 million, and in the same year signed a capital and technology tie-up with America’s International Western Electric, the first of a long series of licences taken from Western cable makers. From 1931 the branches multiplied: Igetalloy cemented carbide, which grew out of research into the dies used to draw wire, and equity stakes in Tokai Densen (today Sumitomo Wiring Systems) and, in 1937, Tokai Rubber (today Sumitomo Riko). A wire company had begun to grow limbs in hard metals, rubber and special alloys — the pre-war affiliates that would later become the consolidated group.

By 1939 the goods had outrun the name, and the company became Sumitomo Electric Industries: oil-filled capacitors, cemented-carbide tools, acid-resistant nickel and piano wire, anti-vibration rubber, sintered parts. New works at Itami (1941) and Nagoya (1943) served wartime military production; capital reached ¥120 million and headcount about 15,000 before American bombing wrecked the Osaka and Nagoya plants. The zaibatsu was dissolved but the operating company survived intact, rebuilt a national sales network in 1946, recovered pre-war wire output by 1948, and in 1949 listed in Tokyo, Osaka and Nagoya. That same year it entered two businesses that would define its next half-century: overhead transmission-line construction, and automotive wiring harnesses.

Between the late 1960s and the mid-1980s almost every business that constitutes Sumitomo Electric today came into existence within a single compressed window: electron-beam irradiated tubing (1962) and wire (1964), traffic-control systems (1968), flexible printed circuits (1969), compound semiconductors (1970), optical fibre cable (1974) and synthetic single-crystal diamond (1985). None of it was commodity copper or aluminium. All of it was functional material — electronic, optical, superhard — and the research capacity concentrated at the Itami works is where pre-war metallurgy and powder metallurgy met electron-beam processing and crystal growth.

This was the founding logic redirected. The habit of putting fabrication next to the material, learned when copper rod and copper wire shared a roof, was now aimed at electronics and optics. Optical fibre rose in step with the telecommunications investment of Nippon Telegraph and Telephone Public Corporation, then building out the national network; compound semiconductors became the source of the later GaAs and InP optical-device line. Overseas work followed — a Nigerian telecom network contract in 1976 — and in 1979 the company raised equity at market price for the first time. Through the 1970s the revenue mix tilted toward electronics and communications, and a cable maker turned into a diversified electrical-materials company.

Local supply came first. Sumitomo Electric Wiring Systems was set up in the United States in 1986, the first step toward building harnesses where the cars were assembled; Sumitomo Electric Lightwave followed in 1994 to make optical fibre in the same market. At home the direction was the reverse — consolidation. In 2001 the high-voltage power-cable business was transferred into J-Power Systems, a joint venture with Hitachi Cable, the company’s entry into the restructuring of Japan’s power-cable industry.

The domestic businesses were then pulled apart into units that had to earn on their own: brakes and ABS to Sumitomo Electric Brake Systems and the spin-off of Sumitomo Electric Fine Polymer (both 1999), ADSL, special metal wire and magnet wire split off in 2002, powder alloys and diamond into Sumitomo Electric Hardmetal in 2003. The same year brought an executive-officer system and a business-division structure — a federation of divisions rather than a single cable maker. Revenue climbed from $11.9B (¥1.49tn) in the year to March 2002 to $15.8B (¥1.74tn) in the year to March 2005.

In 2006 Sumitomo Electric bought a German automotive wiring-harness maker — today Sumitomo Electric Bordnetze — and with it direct supply to European carmakers; in 2007 it took Sumitomo Wiring Systems fully in-house and consolidated Nissin Electric. What it acquired was less capacity than a customer base that following Japanese automakers abroad had never reached. Revenue jumped to $20.2B (¥2.38tn) for the year to March 2007 and $24.6B (¥2.54tn) the year after, with a record operating profit of $1.4B (¥149bn).

Then the leverage cut the other way. In the year to March 2009 revenue fell to $22.7B (¥2.12tn) and operating profit to $251.3M (¥24bn) — about a sixth of the prior year — with the Japan segment in the red. Earnings tied to global vehicle build rates swing hard, and the operating margin settled into a 4–6% band that scale alone never lifted. The information and communications segment was worse: repeated losses through the 2010s and again in the year to March 2024, squeezed between Corning and Prysmian on price and a domestic fibre market past its peak. The 1974 optical-fibre business had become large without ever becoming profitable.

The offset came from environment and energy — power cable and the rectangular magnet wire used in electric-vehicle motors — which grew from $5.1B (¥496bn) to $6.2B (¥810bn) in revenue as decarbonisation and electrification arrived together. J-Power Systems was taken over outright in 2014, the German cable maker Südkabel in 2024, and in 2023 Nissin Electric and Techno Associe were bought in full, unwinding part of the parent-subsidiary listing overhang. Matsumoto Masayoshi ran the company through the expansion from at least 1998; Inoue Osamu took over in 2017 with the job of making the acquired businesses earn. Revenue roughly doubled to $29.1B (¥4.4tn) by March 2024, and the shift to selecting businesses on return rather than size finally showed: the mid-term plan’s pre-tax ROIC target of 8% was cleared in FY2024 at 9.3%, with ROE at 8.6%, and information and communications turned profitable on optical-device demand from generative AI.