Sumitomo Electric shares rise 6% to three-week high on Meta cable deal
Sumitomo Electric Industries shares surged 6.1% on Thursday, reaching their highest level in three weeks, after the company announced a collaboration with Meta Platforms and NEC to construct a next-generation transoceanic submarine cable. The Nikkei 225 index also climbed 1.3% midday, with electronic-equipment stocks leading the market.
The partnership will see the creation of Petal, a roughly 7,000-kilometer submarine cable connecting the United States and France, slated to commence operations in 2029. Petal will be the world's first commercial petabit-class transoceanic optical submarine cable system, boasting transmission capacity of approximately 1 petabit per second.
Meta will fund and manage the cable's operation, while NEC will oversee the system's design and construction, with Sumitomo Electric providing its 2C Z-PLUS Fiber ULL multicore optical fiber. This project aims to boost capacity while minimizing additional power and infrastructure needs. The agreement follows Meta's ongoing expansion of subsea infrastructure to meet rising data traffic and AI-related computing demands, with the company having invested in over 20 subsea cable projects.
Japanese markets were closed for a holiday earlier in the week, allowing Thursday to serve as the first full trading session for Tokyo investors to respond to the news.
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