As the spread of generative AI drives up data-center power loads, photonic-electronic fusion is attracting attention as a technology that combines energy efficiency with high-speed communications. We examine NTT's IOWN concept and real-world demand trends for 14 related stocks.
Photonic-electronic fusion is attracting attention as a potential solution to the power constraints facing data centers. The approach aims to expand bandwidth while reducing power consumption by replacing electrical wiring with optical connections, and NTT is developing a commercialization roadmap centered on its IOWN concept. This article organizes the rationale for photonic-electronic fusion, the progress of IOWN, and related stocks into three categories.
Under the photonic-electronic fusion mechanism and IOWN roadmap, demonstrations centered on PEC-2 are advancing in Japan and overseas, and the commercial offering of photonic-electronic fusion switches during fiscal 2026 has been announced. Field deployments in India and Chile and GPU demonstrations in Japan are expanding, with total capacity expected to reach 102.4 terabits per second. This has strengthened the shift in interest from theme stocks toward actual demand.
Among the leading stocks, NTT and Fujikura have actual demand at the forefront. NTT is positioned as the core of IOWN, although standalone revenue from IOWN itself has not been disclosed. Fujikura is capturing demand from AI data centers and recorded sharply higher first-quarter revenue of ¥402.0 billion and operating profit of ¥104.8 billion for the fiscal year ending March 2027.
Potential secondary beneficiaries include Sumitomo Electric Industries, Furukawa Electric, Hamamatsu Photonics and SEIKOH GIKEN. Sumitomo Electric has seen a notable contribution from optical wiring and optical devices, while Furukawa Electric is advancing the expansion of actual demand for optical fiber and the development of mass-production technology. Hamamatsu Photonics is capturing demand for photonic semiconductors, although the profitability of its laser business remains a point to watch. SEIKOH GIKEN has strong actual demand for optical connectors and measurement equipment and posted substantial year-on-year revenue growth on a quarterly basis.
QD Laser, THine Electronics, Advantest, Lasertec and Ibiden are identified as smaller companies whose share prices are driven primarily by the theme. Their performance will be affected by AI semiconductor demand and progress toward mass-production adoption, but in some cases direct orders and mass-production benefits from photonic-electronic fusion have not been clearly disclosed, making it necessary to distinguish individual actual demand from adoption status.