Italian cable manufacturer Prysmian has secured a long-term contract worth up to €5.5 billion with Molex to supply optical cables for data centers. The deal, which includes a €550 million upfront payment, supports the company’s push into AI-driven infrastructure and long-term revenue growth. Investors will monitor how this expansion impacts production capacity and capital spending.
Prysmian, the Italian cable and fiber giant, has entered into a major long-term supply agreement with Molex, a subsidiary of Koch Industries. This contract, valued at up to €5.5 billion, centers on the supply of critical optical cable infrastructure required for modern, high-capacity data centers. As part of the agreement, Prysmian will receive an initial payment of €550 million, providing immediate cash flow to support its ongoing capital expansion projects.
Strategic Expansion in Digital Infrastructure
This partnership is a core component of Prysmian’s strategy to capitalize on the rising demand for connectivity solutions driven by artificial intelligence and cloud computing. The company expects this venture to generate significant long-term growth, projecting that these initiatives could contribute more than €10 billion in cumulative revenue by 2035. Beyond the immediate order, Prysmian targets annual revenue from these data center-linked projects to reach approximately €1.1 billion by 2031.
Scaling Production Capacity
To support the supply requirements of this deal and broader market demand, Prysmian is undertaking a massive investment program. The company plans to spend €1.25 billion by 2031 to more than double its fiber production capacity in the United States. This capital spending also extends to European manufacturing facilities, which are being upgraded to handle increased volume for optical cable production. While these investments are intended to secure market share in a growing sector, they involve a significant commitment of funds. The company’s ability to execute these capacity upgrades within the planned timeline while managing its debt load will be a key area for investors to follow.
Market Context and Future Monitoring
The data center and AI infrastructure market has seen intense competition among global cable and connectivity providers. Prysmian's ability to lock in a multi-year deal with a major player like Molex highlights its effort to build a business advantage in this segment. For investors, the long-term benefit of this agreement will depend heavily on the actual pace of data center construction and the company's success in managing the costs associated with its large-scale production expansion. Moving forward, stakeholders should track the company’s capital expenditure updates, production volume progress in the U.S. and European markets, and the consistency of its profit margins as these new projects are commissioned.