Japan’s Sumitomo Electric Industries will begin fully integrated production of fiber optic cables in China this month to capitalize on booming demand in the country, a press report said yesterday.
Major Japanese and US makers have been reluctant to produce glass base materials, a key fiber optic material, in China to prevent technology drain, the Japanese business daily Nikkei Shimbun said.
However, the attitude appears to be changing as China accounts for about 50 percent of global demand for fiber optic cables and the share is expected to expand, the daily said.
Sumitomo Electric has established a new factory in Hangzhou, in the Yangtze River Delta region, and will start mass production of base materials by the end of this month, the daily said.
A joint venture with Futong Group, a major Chinese optical cable maker, will run the facility, it added.
Last year, Sumitomo Electric controlled 14 percent of the global market, the second-largest share.
The planned production increase will bring its market share close to 20 percent for the top maker, Corning of the US, Nikkei said.
As sophisticated technology is required, only a few companies, including Japanese makers Sumitomo Electric, Fujikura, Furukawa Electric and Hitachi Cable as well as Corning, can make the materials, Nikkei said.
Dutch firm Draka is presumed to be the only major maker currently producing base materials in China.
Sumitomo Electric’s investment in the project, including an optical cable plant in Tianjin due to start up next month, will total about ¥15 billion (US$175 million).
Until now, fiber optics have been assembled at the firm’s optic cable factories in Shenzhen and Chengdu, using base materials imported from Japan.
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