Furukawa Electric Co has entered into a binding agreement with the Philips Group to acquire its US subsidiary SuperPower Inc, a manufacturer of second generation high temperature superconducting (“2G HTS”) wire. The closing of the transaction remains subject to various regulatory and governmental approvals as well as other closing conditions

Through this acquisition, Furukawa Electric gains a position as one of only two companies in the world with the capability for commercial production of 2G HTS wire today, and plans to expand both its and SuperPower’s business aggressively in the globally-expanding smart grid sector, alternative energy sector and industrial sector by providing superconducting wire as well as developing other applied superconductor devices.

Furukawa said on 17 October that it will purchase all SuperPower shares, probably paying around 5 billion yen (about 60 m USD). Despite SuperPower’s small scale – it employs only 59 people – it can make 400km of the wire in a year at full production. It is one of only two firms in the world that make the product in volume.

Furukuwa has developed technology for the next-generation wire, but lacks facilities for mass production. It intends to invest 1.5 billion yen to quintuple production capacity to an annual 2000 km in five years.

In the hope of catching up with the only other producer, American Superconductor, Furukawa plans to lift superconducting-wire sales to 10 billion yen in 2016, including related devices. Currently, its superconducting-wire business is worth about 1 bn yen annually.

The acquisition will also give Furukawa better access to markets outside Japan at a time when its domestic power utilities are delaying plans for superconducting cables.