Proxima Fusion taps Japan for HTS tape in fusion supply chain race

Munich-based Proxima Fusion signed agreements with two Japanese industrial partners on October 28 to build the supply chain for what it hopes will be the world’s first commercial fusion power plant, CNBC reported.

The deals with Fujikura and Kyoto Fusioneering were signed in Tokyo with Japanese Prime Minister Sanae Takaichi and German Chancellor Friedrich Merz in attendance. The optics of a German chancellor and a Japanese prime minister witnessing a fusion supply chain agreement between a startup and a 141-year-old industrial conglomerate tell you that governments are treating fusion as a strategic technology, not a science project.

Proxima is developing a type of magnetic confinement device called a stellarator, which uses powerful magnets to hold super-heated plasma in place for long periods. The agreement with Fujikura covers industrial-scale manufacturing in Germany of high-temperature superconducting tape, or HTS tape, the specialized metallic ribbon that makes those magnets possible. The agreement with Kyoto Fusioneering covers next-generation gyrotrons, the devices that generate the microwaves used to heat the plasma.

Why HTS tape is the bottleneck

HTS tape is a thin metallic ribbon that can carry electrical current with virtually no resistive losses at relatively high temperatures. It is wound into coils to form the powerful magnets that confine and control the plasma inside a fusion reactor. Without enough of it, you cannot build the magnets. Without the magnets, you cannot confine the plasma. Without the plasma, you cannot fuse atoms and release energy. The tape is the bottleneck.

Francesco Sciortino, Proxima’s CEO and co-founder, told CNBC that Fujikura sees HTS tape as the next optical fiber. Fujikura built its reputation manufacturing optical fibers, and the company employs over 50,000 people worldwide. The analogy is apt: optical fiber was a niche material that became the backbone of the internet, and Fujikura is betting that HTS tape will be the backbone of fusion energy.

Proxima plans to build a 140 million euro facility in Lower Saxony to manufacture about 5,000 kilometers, or 3,100 miles, of HTS tape annually by 2030. The facility would be partly financed by the proceeds of a $468 million funding round in July, which valued Proxima at $2.7 billion. The company’s backers include Alphabet-owned Google.

The scale of the demand is staggering. Proxima expects to need around 20,000 kilometers of tape for its “Alpha” demonstrator and a further 40,000 kilometers for its planned “Stellaris” power station. That is 60,000 kilometers of specialized superconducting ribbon, enough to circle the Earth one and a half times. The Lower Saxony facility, at 5,000 kilometers per year, would take 12 years to produce that much tape at full capacity. Proxima will need more than one facility, or it will need to buy tape from Fujikura’s existing operations in Japan.

The geopolitical angle

Ann Mettler, president of Catalyse Europe and a former vice president of Breakthrough Energy, told CNBC that fusion should be a strategic imperative for Europe. “Europe is a resource-poor geography and we are very dependent on China. The world is in competition for technological supremacy. This is a zero-sum game,” she said. “Fusion is a silver bullet because the promise is abundant, clean, limitless energy.”

Mettler’s framing gets at why the German chancellor and the Japanese prime minister showed up for a startup signing ceremony. Europe wants to build a fusion supply chain that does not depend on China. Japan has the industrial base to help. The partnership is about more than one company’s magnets. It is about whether the West can build the industrial capacity for a technology that could replace fossil fuels entirely.

The comparison to the semiconductor supply chain is hard to avoid. The world is spending hundreds of billions of dollars to build chip fabrication capacity outside of Taiwan. Fusion supply chains are earlier in their development, but the logic is the same. If the technology works, the countries that control the supply chain will have an enormous strategic advantage. Proxima is trying to make sure that supply chain is in Germany, not in China.

The competition

Proxima is not the only company racing to build a fusion power plant. U.S.-based Commonwealth Fusion Systems, also backed by Google, is developing a tokamak device and has raised more than $2 billion. Helion Energy, another U.S. startup backed by Sam Altman, is pursuing a different approach. Canada’s General Fusion is working on magnetized target fusion. China has state-backed players, most notably China Fusion Energy Co. Tokyo-based Helical Fusion leads Japan’s domestic effort.

Sciortino said he is confident Proxima will be the first to turn on a pilot plant, according to CNBC’s coverage of the fusion sector. He stressed that the key to profitability is making the plant simple to operate. “You can have complexity in the design, manufacturing and operation of the plant,” he said. “We can take care of the complexity in the design and manufacturing, but our view is that there needs to be simplicity in the operation. We are aiming for net energy gain during the early 2030s.”

Net energy gain is the milestone that matters. It means the reactor produces more energy than it consumes. No fusion company has achieved it yet. The National Ignition Facility at Lawrence Livermore National Laboratory achieved net energy gain in a laser fusion experiment in 2022, but that was a single shot in a scientific instrument, not a power plant. Proxima is targeting sustained net energy gain in a device that can be operated as a commercial facility.

The supply chain challenge

Mettler made a point that applies to every frontier technology. “The supply chain in fusion energy needs to be built years before,” she said. “People often think of frontier technologies as a switch that can be thrown. That is not the case here.”

This is the unglamorous reality of fusion. The physics is hard, but the physics is being solved. The supply chain is harder, because it requires manufacturing capacity for materials that do not yet have commercial markets. Fujikura is betting that HTS tape will be a big market, and it is building capacity before the demand fully exists. Proxima is building a tape factory before its reactor is finished. The two companies are making industrial bets on a technology that has not yet proven it works at commercial scale.

That is what the Tokyo signing ceremony was about. Not a physics breakthrough, but a manufacturing bet. If fusion works, the companies that built the supply chain early will dominate the industry. If it does not work, they will have spent a lot of money on superconducting tape factories that have no other use. The bet is being made anyway, and that is a stronger signal of confidence in fusion than any press release.

What I think

The fusion story has always been about two things: the physics and the supply chain. The physics has been getting better. The supply chain is now getting built. Those two curves are converging, and the intersection point is somewhere in the 2030s.

Proxima’s deal with Fujikura is the most important fusion supply chain agreement I have seen. HTS tape is the bottleneck, and the bottleneck is being addressed by a 141-year-old Japanese industrial conglomerate that knows how to manufacture at scale. This is not a startup making a deal with a startup. This is a startup making a deal with a company that has been manufacturing advanced materials for over a century.

The geopolitical framing matters too. Europe is building a fusion supply chain with Japan because it does not want to depend on China. The same logic that is driving the semiconductor reshoring effort is now driving fusion supply chain investment. The difference is that fusion is earlier, and the supply chain is less developed. The countries that build it first will have a head start that is hard to close.

I am still skeptical that fusion will produce commercial power in the 2030s. The physics is hard, the engineering is harder, and the economics are harder still. But I am less skeptical than I was a year ago. The supply chain is being built. The money is being spent. The industrial partners are signing on. When 141-year-old companies start building factories for a technology, they are not doing it for the press. They are doing it because they think it will work.