August 18, 2026
1st Quarter of FY2026 Financial Results Conference Call Q&A Summary
Date and Time: Friday, August 7, 2026, 15:00-16:07 (Web meeting)
Speakers: Naoki Okada, Director, President and CEO
Kazuhito Iijima, Director, CFO
◆ YoY Changes in Q1 Results and Details of the Forecast Revision
Q1.
Operating profit in the Telecommunication Systems business increased significantly year on year.
Could you provide a breakdown of optical components, optical cables, and other products?
A1.
In the Telecommunication Systems business, net sales increased significantly from JPY 143.8
billion in Q1 of FY2025 to JPY 264.4 billion in Q1 of FY2026, while operating profit increased
from JPY 34.0 billion to JPY 98.0 billion. The majority of the increase in net sales was attributable
to optical components, which were also highly profitable due to short lead-time responses. In
addition, profitability improved more than the increase in net sales, supported by growth in
engineering business for data center in the U.S. and an improved product mix for optical fiber
cables.
Q2.
What changed after the announcement of the forecast revision dated June 18? The 1st half forecast
has also been revised upward substantially. What happened during this period? Could you
quantify, as much as possible, the breakdown of the factors behind the 1st half and full-year
forecast revisions, including volume increases in optical components due to data center project
orders, the impact of hydrogen, price increases and improved product mix?
A2.
The upward revision to the 1st half forecast was mainly since orders for a large optical component
project expanded beyond our initial forecast. For the full-year forecast, we revised the forecast
by incorporating a large project into the second half as well, whereas they had previously been
factored in only for the 1st half. Quantifying the factors behind the 1st half and full-year forecast
revisions is difficult as of today, but we will consider providing such information in the future
based on your request. The impact of hydrogen has eased considerably, and its impact is much
smaller than that of the large order for optical components.
◆ Large Optical Component Project
Q3.
Could you explain the background to the large optical component order that was the main factor
behind the latest forecast revision? Was this order received suddenly, or were they strategically
targeted? Also, are they expected to continue into FY2027 and beyond, or will additional orders
be difficult due to capacity constraints?
A3.
The latest forecast revision was mainly attributable to the sudden receipt of new large optical
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component order outside the U.S. We believe this order was secured because we were able to
respond to urgent customer demand with short lead times. We expect the project to continue at
least through FY2026. In the forecast revision dated June 18, the project was incorporated only
for the 1st half, but this time it has also been incorporated into the 2nd half. However, the possibility
of continued orders or further order expansion for similar projects depends on customer
investment plans and the occurrence of such projects, so it is difficult to provide a clear outlook
at this point. Demand outside the U.S. is also increasing, and we intend to continue actively
pursuing such opportunities. On the other hand, at present, there are no new large projects for
which orders are certain in the 2nd half.
Q4.
Data center projects are generally planned carefully in advance, and sudden orders do not seem
to occur very often. Do you have any understanding of the circumstances behind this order?
A4.
As this relates to customer information, we are unable to provide details.
Q5.
Could you explain the content of optical components, the production structure, including in-house
and outsourced production as well as domestic and overseas production, and how you respond to
short lead-time and large-volume order? Do you strategically hold inventory, or do you produce
in response to orders? Also, how should we understand this in light of the fact that there did not
appear to be a significant inventory build-up at the end of FY2025?
A5.
Optical components are connectivity and cabling-related products used within data centers,
including pre-connectorized cables, patch cords, cabinets, patch panels, splice cassettes, and
similar products. Production is not conducted in Japan; rather, we utilize production sites around
the world. We refrain from commenting on inventory strategy or specific approaches to handling
individual projects, as these relate to our business strategy. However, we are responding to
customer requirements by utilizing our global production and supply structure.
Q6.
You previously stated that, while optical fibers and optical cables capacity remain constrained,
you would like to make optical components and similar products a third pillar of earnings. Since
when have you been targeting this opportunity?
A6.
Since new plants for optical fibers and optical cables take time to start up, we have been focusing
since last year on expanding sales of optical components, which use relatively smaller amounts
of optical fibers, as one measure to address this issue. In addition, by allocating limited optical
fibers to higher value-added products, average selling prices have also increased.
◆ Regional Trends
Q7.
Looking at net sales by region, Asia recorded a large increase after the U.S.
Does “outside the U.S.” for the large optical component project refer to Asia? If so, is it an
Asia-related project for an existing U.S. hyperscale customer, or are you beginning to capture
local data center projects in Asia, including China?
A7.
We would like to refrain from commenting on specific customer names, regions, or similar details,
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as these constitute confidential sales information. We would ask you to make your own
assessment based on the significant increase in net sales in Asia. Another factor contributing to
high profitability is that projects for Asia are not affected by U.S. tariffs.
◆ Prices, Price Increases and Product Mix
Q8.
To what extent have prices increased year on year for each product? Could you provide a rough
breakdown of the “price increases and improved product mix +JPY 23.4 billion” shown on page
7 of the presentation material for 1Q of FY2026? Are you also raising prices for the same
products?
A8.
We are making progress on price revisions for the same products, including those associated with
short lead-time responses. At the same time, the product mix is improving as we allocate optical
fiber to high value-added products in areas where we have strengths, such as ultra-high-fibercount cables and Air Blown WTC™. Therefore, it is difficult to clearly separate the effect of price
increases from the effect of an improved product mix. As one example of a price revision for the
same product, certain customers accepted a price increase of approximately 25%.
◆ Optical Fiber Procurement and Supply Environment
Q9.
Regarding external procurement of optical fiber, some market participants believe that the supplydemand environment may improve globally as demand for drone applications settles down. Have
you seen any change in procurement conditions? Also, from a medium- to long-term growth
perspective, is it correct to understand that top-line growth from FY2027 onward will depend on
the volume of external procurement?
A9.
Since we do not handle optical fiber for drone applications, we do not have information on supplydemand trends for that application. On the other hand, global optical fiber prices remain on an
upward trend, and demand is strong not only from data centers but also from telecommunications
carriers. Therefore, at present, we do not feel that supply-demand tightness has eased. From a
medium- to long-term perspective, we expect demand to continue expanding steadily. If we can
increase external procurement volumes before the new plant starts up, we believe this will
contribute to top-line growth. Accordingly, external procurement can be both an upside factor and
a risk factor. Although we will continue working to improve productivity and yields at existing
facilities, we expect to remain dependent to a certain extent on external procurement until the
new plant is completed.
◆ Production Capacity, New Plants and Optical Connector Capacity Expansion
Q10.
Are there any updates on capacity expansion plans for optical connectors and optical fiber cables?
Also, could you update us on the progress of the new U.S. plant? In addition, is it correct to
understand that optical components capacity still has room, even taking into account the large
project order received FY2026?
A10.
We continue to expand optical connectors capacity appropriately and in a timely manner, as
before. The new optical fiber plant in Sakura began operations last year and is currently operating
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at a level close to full capacity. We continue working to improve productivity and yields.
Regarding the new U.S. plant, we are currently in the process of selecting a location. In June
2026, we established Fujikura Optical Cable Systems LLC as a preparatory company for
construction. Optical components, like optical connectors, do not require large-scale investments
and have short lead times for start-up, so we intend to invest flexibly in response to demand
trends.
◆ Sources of Competitiveness and Profitability, and Review of the Mid-Term Plan
Q11.
What are the sources of competitiveness and excess profitability in optical components and
engineering business for data center? If the advantage is only short lead-time response, it may be
difficult to maintain superiority. Can know-how such as shortening construction periods be
maintained going forward?
In addition, in the Mid-Term Plan, you separated upstream operations, where capacity expansion
takes time due to constraints, from downstream operations, where capacity can be expanded
flexibly, and presented a growth scenario for downstream operations. In light of the large project
order received this time, has there been any change in the thinking behind the Mid-Term Plan?
A11.
Our strengths lie in high value-added products such as SWR™/WTC™, flame-retardant cables,
and Air Blown WTC™, as well as in our technological capabilities that enable us to continue
developing new products. We believe we can maintain this differentiated advantage. Another
strength is our ability to provide optical fiber cables, optical connectors, fusion splicers, and
engineering business for data center as an integrated solution. In particular, providing engineering
business together with products creates significant value for customers by shortening construction
periods. Short lead-time response is also becoming one of our strengths, as customers are
increasingly prioritizing delivery schedules over prices amid tight procurement conditions.
At this point, we are not considering a review of the Mid-Term Plan. Since this project is projectbased and some aspects of the future remain uncertain, we would like to take a little more time
before discussing medium- to long-term future plans.
In the short term, we will seek top-line growth in optical components, engineering business for
data center, and other areas that are less constrained by optical fiber production capacity, while
supplementing capacity shortages through external procurement, including preforms and optical
fibers, and in this case cords and cables. Over the medium to long term, we will also focus on
increasing optical fiber production capacity through the new plant. This new plant is not merely
a repeat investment to increase capacity; rather, it aims to achieve high productivity through
innovative manufacturing technologies. We are targeting a cost-competitive structure that will
allow us to compete sufficiently even if the supply-demand environment eases and price
competition intensifies in the future.
◆ Equity-Method Investment Income
Q12.
Is the increase in share of profit of equity-method investments due to the strong performance of
US Conec?
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A12.
As you suggest, demand for ferrules remains strong, and the performance of US Conec, share of
profit of equity-method investments, remains solid. This has led to an increase in equity-method
investment income and is also one factor behind the forecast revision.
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