Mitsubishi Electric plans to build three facilities to produce electronic systems for the Global Combat Air Programme (GCAP) fighter jet. The project is being developed by Japan, Britain, and Italy, with the aim of deploying a frontline fighter by 2035.
The industrial leadership of the GCAP includes Mitsubishi Heavy Industries in Japan, BAE Systems PLC in Britain, and Leonardo in Italy. Canada has joined the programme as an observer.
Mitsubishi Electric says it will receive compensation for building prototypes and deploying personnel. The company is seeking to increase its annual defense business sales to 690 billion yen ($4.4 billion) by March 2031, which would be an increase of more than half.
Mitsubishi Electric's target annual defense business sales by March 2031.
Export growth and market opportunities
Growth is expected to be driven by exports, including work for the GCAP, components for AIM-120 AMRAAM air-to-air missiles made by US defense company RTX Corp, and equipment for Mogami-class warships that Japan will supply to Australia.
In April, Japan eased decades-old restrictions on arms exports to strengthen its domestic defense industry. While Germany and Saudi Arabia have been discussed as possible additional partners for the GCAP, officials stated that new entrants must not delay the 2035 rollout target.
Financial outlook and global demand
Mitsubishi Electric CFO Kenichiro Fujimoto said the GCAP project could begin contributing to earnings around fiscal 2029 or 2030, or potentially a year earlier.
Fujimoto said the depletion of US missile stocks during its conflict with Iran and weapons supplied to Ukraine could create opportunities for Japanese manufacturers as Washington seeks to replenish its arsenals.
There is nothing specific I can disclose, but at the macro level, the possibility exists.
