Proxima Fusion Looks to Japan for Supply Chain as Germany Chases Industrial Revival
The Munich-based nuclear fusion start-up, Europe's best-funded in the sector, is partnering with Japanese manufacturers to build critical reactor components on German soil.
A Munich Start-Up Bets on Cross-Continental Manufacturing
Proxima Fusion, the Munich-based nuclear fusion venture carrying the largest funding round in European fusion to date, is working with Japan's Fujikura on a potential manufacturing facility in Lower Saxony. The collaboration centres on producing components essential to fusion reactors, a technology still unproven at commercial scale but increasingly viewed as a long-term answer to energy security and industrial competitiveness.
The partnership reflects a broader strategic calculation. Germany's industrial base has faced mounting pressure over the past three years as energy costs remain elevated and manufacturers eye relocations to markets with cheaper power. Proxima Fusion's chief executive has pointed to China as a frequent destination for companies seeking stable, low-cost nuclear electricity, a resource Germany lacks.
At Opentechwire, we have tracked how fusion ventures across the United States, China and the United Kingdom have secured government backing and private capital at unprecedented rates since 2023. Proxima Fusion's approach stands out for its emphasis on supply-chain localisation rather than laboratory milestones alone, a recognition that commercial viability hinges as much on manufacturing scale as on plasma physics.
Why Japan Matters to a German Fusion Bet
Fujikura, a Tokyo-listed firm with decades of experience in optical fibre and advanced cable systems, brings manufacturing expertise that European fusion ventures have struggled to develop domestically. The component in question, which Proxima Fusion has not named publicly, likely involves superconducting materials or high-precision magnetic containment systems, both areas where Japanese suppliers hold process know-how that rivals in Europe and North America are still building.
The choice of Lower Saxony is not accidental. The state has offered financial incentives to advanced manufacturing projects since 2024, part of a federal push to reverse deindustrialisation. Lower Saxony's proximity to ports and existing chemical and automotive supply chains makes it a logical site for a facility that will require rare materials and cleanroom-grade production environments.
Yet the partnership also underscores a gap. Germany, despite its engineering legacy, no longer possesses the full stack of capabilities needed to build fusion infrastructure without external partners. Japan, meanwhile, has maintained investment in materials science and precision manufacturing even as its own energy sector remains heavily reliant on imported liquefied natural gas. The alignment of interests is clear, but the execution risk remains high given fusion's unproven commercial timeline.
The Industrial Context Behind the Fusion Push
Proxima Fusion's supply-chain strategy cannot be separated from Germany's broader industrial crisis. Energy-intensive sectors, including chemicals, steel and automotive parts, have seen capacity migrate to the United States, where subsidies under the Inflation Reduction Act have drawn investment, and to China, where electricity prices remain structurally lower due to coal and nuclear baseload.
The chief executive's comments about companies moving to China over energy costs reflect a reality that German policymakers have acknowledged but not yet solved. Nuclear power remains politically contentious in Germany following the shutdown of the country's last reactors in 2023. Fusion, by contrast, offers a narrative escape: the promise of nuclear energy without long-lived radioactive waste or meltdown risk.
Still, fusion power plants are unlikely to come online before the mid-2030s under the most optimistic projections. Proxima Fusion and its competitors, including Commonwealth Fusion Systems in Massachusetts and China's ENN Energy, are racing to demonstrate net energy gain in pilot reactors. The manufacturing facility in Lower Saxony is a hedge, a signal to investors and governments that the company is building physical infrastructure even as the science remains incomplete.
Capital, Politics and the Fusion Funding Wave
Proxima Fusion's backers include entities linked to Google's parent company, part of a wave of technology conglomerates betting on fusion as a future data-centre power source. Alphabet, Microsoft and Amazon have all announced partnerships or investments in fusion ventures since 2024, driven by the energy demands of artificial intelligence infrastructure.
This capital has allowed Proxima Fusion to outpace European rivals in both funding and ambition. The company has not disclosed the total size of its funding rounds, but industry observers estimate it has raised well over one hundred million dollars, making it the best-capitalised fusion start-up in Europe. That capital is now being deployed not just in research but in supply-chain development, a shift that marks a new phase in the sector's evolution.
Japan's involvement adds a geopolitical dimension. The country has committed to collaboration with Germany on fusion energy projects, including the possibility of joint power plant development. The Fujikura partnership is an early materialisation of that commitment, though it remains to be seen whether Japanese firms will become long-term manufacturing partners or simply technology licensors.
The Risk of Building Before Proving
The decision to invest in manufacturing infrastructure before achieving commercial fusion raises questions about capital allocation. If Proxima Fusion's reactor design fails to achieve the necessary energy output, or if competing approaches prove more viable, the Lower Saxony facility could become a stranded asset.
Yet the company appears to be wagering that governments will continue to subsidise fusion infrastructure regardless of near-term results, a bet that has paid off for other deep-tech sectors. Quantum computing, advanced batteries and synthetic biology have all attracted sustained public funding despite extended timelines and uncertain returns.
Germany's willingness to support the facility also reflects a political imperative. With industrial output declining and energy security unresolved, fusion offers a rare area where government, capital and public sentiment align. The technology's association with innovation and sovereignty makes it easier to fund than, say, new gas pipelines or coal plants.
What Comes Next for European Fusion Supply Chains
If the Fujikura partnership proceeds as planned, it will set a precedent for how European fusion ventures build their supply chains. Rather than relying on a single country's industrial base, companies may pursue multi-national partnerships that combine capital, manufacturing expertise and political support from different regions.
This model has advantages. It spreads risk, leverages comparative advantages and aligns with the cross-border nature of fusion research. But it also introduces complexity. Export controls on advanced materials, intellectual property disputes and shifts in trade policy could all complicate partnerships that span continents.
For now, Proxima Fusion's focus remains on securing the facility and proving its reactor design. The company has not announced a timeline for commercial operation, but the manufacturing partnership suggests it is planning for a scenario in which fusion becomes viable within the next decade. Whether that timeline holds will depend not just on physics but on the durability of the political and financial coalitions now backing the technology.
