Japanese toilet maker Toto sees 18% stock surge as AI semiconductor components drive record profits

Shares in Japan's Toto soar on AI-related pivot

Japanese toilet maker Toto's shares surged 18 per cent on Friday after unveiling plans to boost production of semiconductor components and posting record annual profits. Its advanced ceramics business has turned Japan's largest toilet manufacturer into an AI play that has been driving a near-50 per cent share price rise this year and caught the attention of activist investor Palliser Capital. Shares in the company are now trading around ¥6,425 ($40.86) each, taking gains over the past six months to 65 per cent. Despite being better known for its bidet washlets that have defined the Japanese toilet globally, Toto is also the world's second-largest producer of electrostatic chunks used in the manufacturing of Nand memory chips. Surging sales of semiconductor components -- gaining 34 per cent year-on-year -- have lifted the division to account for more than half of Toto's operating profit, which jumped 11 per cent to ¥53.8bn in the year to March. The toilet producer expects sales for the unit to grow 27 per cent in the coming year, as it pledged to invest ¥30bn to strengthen mass production, as well as boost research and development, by the end of the 2028 financial year. Other Japanese companies that produce components essential to the rollout of AI have been benefiting from investor interest and pledging to pour funds into boosting output. The AI boom has led Kioxia, a producer of flash Nand memory, to eclipse Sony in market value. Meanwhile, cosmetics manufacturer Kao started production last year at a cleaning factory for chips and Ajinomoto, the inventor of monosodium glutamate, is investing more than ¥25bn to boost production of its insulating film critical for motherboards by 2030. Palliser had called on Toto to promote the division's importance to the market and plough more of its investment into the highly lucrative segment when it took a stake in February. The big rally for Toto comes despite the threat to its regular business of toilets and bathroom fittings from potential adhesive and plastic shortages due to the Middle East energy shock. Toto suspended new orders of prefabricated baths in mid-April. Although it has since gradually resumed taking orders, building contractors in Japan say that they still cannot get hold of bathroom units to complete projects. The toilet producer said that it expects the risks related to geopolitical turmoil to ease from July, as it factored in a ¥7bn hit. Many analysts, however, were underwhelmed by Toto's results. "Profit guidance gets a passing grade," said Citi analyst Masashi Miki. "Although Middle East assumptions carry some downside risks."

Toilet Maker Spikes in Value as It Flushes Money Into AI

Can't-miss innovations from the bleeding edge of science and tech Last month, failing tech bro shoe company Allbirds made the baffling announcement that it was pivoting to AI -- three magic words that turned the waning business into Silicon Valley's latest obsession overnight. Now Japanese toilet maker Toto, which has been at the epicenter of the country's -- and the rest of the world's -- bidet revolution, is looking to cash in as well. Toto isn't exactly pivoting to AI -- it's more like a doubling down. The company unveiled plans last week to ramp up existing production of semiconductor components, an attention-catching "AI play" that sent its shares soaring by 18 percent to their highest levels since 2021, as the Financial Times reports. In all, the company announced it was investing $190 million to strengthen chip production and boost research and development. While it's far better known for its high-tech toilets -- which not only light up, clean and dry behinds, open and close automatically, spray deodorizer, and flush on their own -- Toto is also the world's second-largest producer of electrostatic chucks, a critical component that holds NAND computer flash storage chips in place during manufacturing. In large part thanks to the massive surge in interest for chips driven by AI, Toto's semiconductor component sales now account for more than half of its profits, according to the FT. Meanwhile its toilet business is starting to plunge, thanks to adhesive and plastic shortages triggered by the ongoing Middle East energy crisis. The company was forced to halt new orders in mid-April as a result. Fortunately, the ongoing AI hype cycle could keep it afloat, at least for the time being.

From Toilets to AI Chips: Toto Joins MSG Maker Ajinomoto as Japan's Strangest Beneficiaries of the AI Spending Frenzy

Well, isn't that unexpected? A Japanese toilet maker has just announced that it will pivot to AI chips, leading to a 18% stock surge. Who would've predicted that a company involved in making toilets and other sanitary equipment would start making AI chips? Well, Toto, A Japanese company, has just announced that and is seeing a boost to its stock. The company leverages creamics for its current operations, but the same creamics can be used for making components that are critical to AI infrastructure. As per the latest report, Toto saw its share surge by 18%, the highest in five years, after the announcement in which it highlighted the production of semiconductor components, including those for the AI market. In a similar case, Ajinomoto, the company behind MSG, a food seasoning, has also seen immense growth as the product is crucial for the creation of advanced packaging technologies such as ABF substrates, a key enabler for next-generation AI chips. Toto, on the other hand, is using its ceramics expertise to make electrostatic chucks, a component used to make chips. These chucks are essentially holding plates for silicon wafers that securely hold them, used for transporting, and to also keep the wafers cool during plasma-based processes. Japanese toilet maker Toto's shares surged 18 per cent to a five-year high on Friday after unveiling plans to boost production of semiconductor components and posting record annual profits. Financial Times As per Financial Times, the Japanese toilet maker has been making these chucks for over 40 years, but due to the recent surge in AI demand, the company is making a lot more of these. And with prices surging for each and every component related to AI, companies are reporting major profit uplifts. From MSG to Toilets, AI is consuming every facet of the supply chain, and based on current estimates, the demand will continue to increase, getting way worse in 2027 than it is right now. So yeah, maybe next year we will be talking about a lack of toilets rather than a lack of memory.