Japan Data Center Update 32: Trading Companies Accelerate Data Center Buildout as Manufacturers’ Margins Rise

Itochu plans ten data centers with 50 MW capacity each by 2030

Itochu Corporation will enter the data center development business. It plans to invest several hundred billion yen to develop approximately 10 data centers, each with a power capacity of around 50 MW, across Greater Tokyo, Kansai, and Kyushu by 2030. Itochu will lease the facilities to hyperscalers, including major US tech companies facing growing demand for AI. The company aims to establish a new revenue source for its real estate business and may collaborate with its partner, East Japan Railway Company (JR East). As part of its real estate business, Itochu will acquire sites and construct the buildings. It plans to sell the data centers to external investors rather than retain ownership.

Other Japanese trading companies are also expanding their data center businesses. Mitsubishi Corporation operates nine data centers in Japan and is developing a large-scale facility on the site of a former JFE Holdings blast furnace in Kawasaki City.

Itochu enters the data center development business (Source: Itochu).

Data center demand lifts wire and cable manufacturers’ operating margins

As data center construction increases, domestic and global demand for communications cables and optical wiring equipment continues to grow, driving strong earnings at wire and cable manufacturers. Their consolidated financial results for the first quarter of FY2026 show that major manufacturing companies significantly increased their operating margins year on year. For instance, Fujikura’s operating margin reached an exceptional 26.1%, up 10.8 percentage points.

Wire and cable manufacturers traditionally operated low-margin businesses centered on the production and sale of commodity products. However, optical fiber and related products for data centers offer higher added value and are helping manufacturers move away from this low-margin structure. “Many customers are willing to buy even at higher prices,” a source at one manufacturer said. In addition to strong market conditions, the weak yen is providing further tailwinds for exports.
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