TOKYO -- Europe's best-funded nuclear fusion start-up, backed by Google, is seeking to deepen ties with Japanese suppliers as Germany looks to build a domestic supply chain for the commercially unproven technology and revive its struggling industrial base.

Munich-based Proxima Fusion is partnering Japan's Fujikura to explore the feasibility of establishing a manufacturing facility in the German state of Lower Saxony to produce a critical component for fusion reactors.

The proposed facility forms part of a project involving about 140 million euros ($155.7 million) in planned investment, according to Proxima, and is aimed at expanding production of high-temperature superconducting (HTS) tape. The material is used to make powerful magnets that confine the extremely hot plasma needed for nuclear fusion, and is currently produced by a handful of Japanese and Chinese suppliers.

Francesco Sciortino, Proxima's co-founder and chief executive, told Nikkei Asia in an interview that the partnership was partly aimed at creating new manufacturing opportunities in Germany, where the country's once-dominant automotive and chemical industries are struggling with declining competitiveness and the relocation of production to China.

The two industries are falling behind in the ability to compete at a pace that is "uncomfortably fast," Sciortino said, adding that access to cheaper nuclear energy in China is encouraging German manufacturers to shift production there.

While fusion is a different type of nuclear reaction compared to conventional nuclear, number of nuclear engineering companies are now trying to cash in on the emerging sector, Sciortino said. "This is not a thing where the German government can be playing around," he said.

Japan is an attractive partner because of its advanced manufacturing capabilities and the prospect of building reliable supply chains, Sciortino said.

In the current geopolitical climate, the "U.S. and China are not currently easy partners for Europe," he said.

Francesco Sciortino, Proxima Fusion's co-founder and chief executive, says the partnership with Fujikura has partly come about because of Japan's relative reliability amid the current geopolitical climate. (Proxima Fusion) Proxima has raised about 650 million euros in private and public funding since its founding in 2023, and counts Google among its backers.

News of the partnership comes as German Chancellor Friedrich Merz visits Tokyo for talks with Prime Minister Sanae Takaichi, with both governments seeking to accelerate investment in fusion technology.

Merz has made fusion a priority, with Berlin seeking to become home to the world's first commercial fusion power plant. Germany has pledged more than 2 billion euros toward fusion research, infrastructure and technology development up to 2029.

The push marks a striking shift for Germany, which shut down its last conventional nuclear power plants in 2023, following a phase-out that accelerated after the Fukushima disaster in Japan in 2011.

Merz is also expected to visit Kyoto Fusioneering, a Japanese supplier developing technologies and components for fusion plants, according to an industry source.

Takaichi's government has identified fusion as one of 17 strategic sectors targeted for investment, with Japan aiming to mobilise about 3.1 trillion yen ($19.6 billion) in public and private funding by fiscal year 2040.

Unlike conventional nuclear power, which generates energy by splitting heavy atomic nuclei, fusion combines light nuclei in a process similar to the reaction that powers the sun. The technology holds the promise of generating vast amounts of low-carbon electricity without the risk of a self-sustaining nuclear chain reaction.

But commercial fusion remains elusive. No fusion plant has yet generated more electricity than it consumes, let alone demonstrated commercially viable power generation. Some experts warn that practical fusion power could still be decades away.

That has not deterred investors, who have poured billions of dollars into fusion start-ups, particularly in the U.S., as the rapid expansion of artificial intelligence and data centers intensifies demand for reliable, low-carbon electricity.

HTS tape is produced predominantly by a handful of Japanese and Chinese companies, resulting in leading fusion companies racing to secure partnerships with Japanese companies, notably Fujikura, which makes "the best tape," among the players, according to one industry source.

Commonwealth Fusion Systems of the U.S., the world's best-funded fusion start-up with about $4 billion raised, has also forged ties with Japanese suppliers, including Fujikura, to secure the critical reactor components.