1、Japan|ElectricalEquity ResearchAugust 14,2025 CarlosFuruya*|Equity Associate+81 3 6830 3618|Thanh HaPham*|Equity Analyst81 3 5251 6160|SayakaShimonishi*|Equity Associate+81 3 6830 3614|BlayneCurtis|Equity Analyst(212)336-7493|AlexFernandez|Equity Associate+1(212)778-8731|JP Cables:Connecting AI From

2、 Power toDataWe initiate coverage of Furukawa Electric and Fujikura with a Buy ratingand Sumitomo Electric Industries with a Hold rating.Furukawa andFujikura have shifted their strategic focus to DC-related business,includingproduction of optical fiber cables and thermal management products.Weprefer

3、 Furukawa and Fujikura over Sumitomo given higher DC marketexposure,and better earnings momentum from now to FY3/27 should leadto share-price outperformance.Favor Furukawa and Fujikura over Sumitomo due to higher data center exposure.Whileall three companies are eager to expand their Telecom(DC)busi

4、ness,we see that Furukawaand Fujikuras current business compositions are better-positioned to benefit from the surgein data center demand.For Furukawa,there are two business segments targeting datacenter market,which are Telecom and Functional Products.Combined,these two segmentsaccounted for 27%of

5、revenue and 20%of the total OP in FY3/25.Fujikuras revenue wascovered 46%by Telecom segment,and the segment also covered 68%of the OP.On theother hand,Sumitomo Electrics core business lies in Auto,covering 54%of the total OP,andTelecom(DC)accounted for only 6%of the OP.As such,we think that Sumitomo

6、s currentbusiness structure makes it hard to benefit from a surge in data center demand.Moreover,heavy exposure to Auto creates multiple risks,including reduced auto demand in U.S.andlosing market share of Japanese OEMs in key markets.Data Center margin growth driven by strong demand in the U.S.Acco