Molex and Prysmian Enter Sourcing Agreement for Fiber-Optic Cables
Key Highlights
- The deal will be Prysmian's full-force entry into the market serving data connectivity needs inside the data center. Its fiber-optic cables serve data center interconnect, and its electrical cables are used for several data center-related connectivity needs.
- With an up-front payment exceeding $600 million, Prysmian will build out more optical-fiber and fiber-production capacity in the U.S. and Europe. It will invest more than $1.4 billion in fiber-capacity upgrades through 2031.
- Molex is surging as an optical-connectivity solutions provider for data centers, and this deal ensures long-term supply of optical components for products like high-density cable assemblies.
- Both companies are involved in other initiatives to meet data centers' connectivity needs, and cite this agreement as a pillar of their future in the data center industry.
To fulfill its supply agreement with Molex, Prysmian will increase its production of fiber-optic cables and optical fiber, including the glass preform stage.
Molex and Prysmian recently announced a supply agreement through which Prysmian will supply optical cables for Molex for a period of up to 10 years, primarily for the purpose of enabling Molex to provide fiber-optic cabling solutions—particularly including cable assemblies—for data centers.
For Prysmian, the partnership with Molex will establish the presence of the company’s cable products inside data centers. Prysmian products already widely serve five other areas of data center operations. The company explains its electrical transmission cables serve long-haul subsea connectivity, as well as sub/land energy applications to address data center-drive grid demand. Prysmian’s acquisition of Encore Wire reinforced its global position with data center power cables, while investments in power-delivery and HVAC support data centers’ connection to the power grid. And Prysmian’s fiber-optic cables, which are produced by the company’s digital solutions business unit, serve data center interconnect (DCI) applications. Now its fiber cables will see wide deployment inside data centers as well thanks to the collaboration with Molex.
Prysmian ramping up fiber production capacity
“Prysmian will implement a capacity increase to extend production of optical cables and fiber, including the glass preform stage, for plants in the U.S. and Europe,” Prysmian said. “The investment, which will more than double fiber capacity in the United States, will build on Prysmian’s position as one of just three U.S. manufacturers of fiber and optical cables, while in Europe, will support Prysmian’s position as the only major domestic player. Prysmian will allocate €1.25 billion [~$1.43 billion] up to 2031 for this capacity increase, and as a result of the investment over 1,000 jobs will be created worldwide, 600 of which will be in the U.S.”
Molex added, “This investment is a key part of Molex’s U.S. expansion and represents one pillar of the company’s broader global strategy to scale fiber cable supply. Increased access to expanded fiber-optic cable capacity helps hyperscalers and data center architects secure a reliable supply through Molex, supporting continuity as market conditions change. By pairing Molex’s data center expertise with Prysmian’s manufacturing scale and technology leadership, both organizations are uniquely positioned to help customers reduce risk, improve lead-time reliability, and support long-term planning for critical deployments.”
Molex’s chief executive officer Joe Nelligan said the deal with Prysmian “enables us to better support our mutual customers. For Molex, this represents a strategic expansion in the U.S., bringing increased capacity to support the growing demand for data center solutions with the quality and reliability our customers expect.”
Prysmian provided some financial details of the deal: total value up to €5.5 billion (~$6.28 billion), including a €550 million (~$628 million) up-front payment, with a duration of up to 10 years.
Optical fiber deal is one of several data center initiatives for each company
Both companies indicated they also have other initiatives underway to serve data centers. As previously mentioned, Molex referred to the deal with Prysmian as “one pillar of the company’s broader global strategy to scale fiber cable supply.” Prysmian explained, “The deal with Molex is part of an overall set of new agreements and commercial initiatives with hyperscalers and data center infrastructure providers foreseen to bring in an addition cumulative value of over €10 billion (~$11.4 billion) on an incremental basis up to 2035, versus the 2025 baseline. This includes up to €1.1 billion (~$1.26 billion) of revenues on a yearly basis from 2031.
Prysmian’s chief executive officer Massimo Battaini referred to the company’s fiber-production expansion as “a transformative moment for Prysmian’s digital solutions. Much like our agreements in the transmission business, we can now benefit in two ways: first, together with our customers, including the important partnership with Molex, we are investing to meet demand. And secondly, we share a clear vision to the market about the buoyancy of demand over the long-term, and Prysmian’s clear ambition to compete in the digital space to create value as a front-runner, in both technology and scale. The agreements and capacity investments strengthen our leadership in data centers, with every part of our business benefiting, from upgrading electricity grids and supplying electrical cable solutions to leveraging our expertise in long-haul digital connections and advancing our role in submarine telecom deployment. We look forward to working with Molex as a long-term partner, and all our customers, in the years ahead as we deliver with speed, quality, and efficiency to unlock the essential fiber and cables that are needed to sustain the huge investment that AI-driven infrastructure will need.”
