NTT (9432) Investor Day 2025 summary

Strategic vision and future roadmap

• Focus on IOWN (Innovative Optical and Wireless Network) as the foundation for next-generation, low-power optical computing to address surging power demands of AI and data centers, shifting from electrical to photonic technologies for efficiency gains.

• Roadmap includes PEC-1 (current), PEC-2 (commercialization in 2025), and PEC-3/4 (future), with progressive deployment from inter-datacenter to board, package, and die-level integration by 2032, targeting mass adoption by hyperscalers and global cloud providers.

• Collaboration with Broadcom (ASIC supplier) and Accton (module assembler) to deliver co-packaged optics (CPO) switches, aiming for a flexible, multi-vendor ecosystem and industry standardization, with market launch starting in 2026.

• Expansion into distributed, data-centric AI infrastructure, enabling efficient GPU resource allocation and dynamic, scalable, energy-efficient data centers globally.

• Plans to scale production lines and invest in manufacturing capacity, targeting millions of units annually and 5,000 units per line per month to meet global demand.

Technology and competitive differentiation

• PEC-2 switch modules and opto-electronic converged switches offer up to 50% power reduction compared to conventional solutions, with unique socket-based optical engine design for easy maintenance and flexible adaptation.

• Proprietary photonics-electronics convergence technology enables high bandwidth (up to 100 Tbps per switch) and low power (targeting 3.9 pJ/bit, with future goals of 0.26 pJ/bit), supporting exponential growth in AI compute and networking.

• Differentiation from competitors through modular, replaceable optical engines, advanced silicon photonics design, and multi-supplier compatibility, allowing cost-effective repairs.

• Demonstrations at the Osaka/Kansai Expo showed computers powered by IOWN 2.0 achieving 1/8 the power consumption of conventional systems, highlighting real-world power savings.

• Ongoing collaboration with global chipmakers and ecosystem partners to ensure integration with leading processors and alignment with industry standards.

Market outlook and business development

• AI compute and networking demand expected to grow 200x over the next five years, with the AI market projected to reach $1.8 trillion by 2030 and data center power consumption doubling by 2030 compared to 2024.

• Initial commercialization targets hyperscalers and large cloud providers, with plans to expand to domestic and global markets as production scales.

• Market size for optical interconnects projected at JPY 7 trillion by 2032, with the transition from copper to photonics seen as a major industry shift.

• Revenue and profitability will depend on customer adoption, unit pricing, and successful scaling of manufacturing; pilot projects and business negotiations with major cloud players are underway.

• Broader business scope includes managed GPU-as-a-service offerings, distributed AI infrastructure, and ongoing R&D for future IOWN generations, with government support for national semiconductor initiatives.