NAND storage is in short supply, major bathroom brand Toto surges!
The artificial intelligence boom is reshaping global supply chains in unprecedented ways, and even Japanese manufacturing giant Toto, known for its bathroom fixtures, has unexpectedly benefited from this capital feast thanks to its discreet semiconductor materials business.
On Thursday, the stock surged as much as 11% in the Japanese market, marking the biggest jump since February 2021. This came after Goldman Sachs analysts upgraded the company’s rating, citing that AI infrastructure construction is tightening the supply of NAND storage chips, thereby boosting demand for key components produced by Toto for chip manufacturing—electrostatic chucks.
This market reaction highlights the profound impact AI data center expansion is having on the upstream supply chain. Goldman Sachs analysts Sachiko Okada and Sayako Tominaga noted in their report that the tight supply-demand environment in the storage industry will act as a tailwind, anticipating Toto's chuck manufacturing business will yield “significant profit growth.” Toto representatives also confirmed that ongoing AI data center construction is expected to further drive up demand for its electrostatic chucks.
The stock movement not only made Toto the best-performing ceramics company in Tokyo’s market on Thursday afternoon, but also reflected the deep foundation Japanese traditional consumer goods manufacturers have in the semiconductor sector. Besides Toto, several Japanese companies—including Ajinomoto, the inventor of MSG, and cosmetics firm Kao—have deeply embedded themselves in the global chip industry chain through cross-disciplinary technology applications.
Invisible Champions Driven by AI
Though Toto is globally renowned for its washlet toilets, it has been an important player in the semiconductor and display supply chain for decades. According to data compiled by Bloomberg, in the fiscal year ending March 2025, the company's new business segment accounted for 42% of its total operating revenue.
The highly discussed product is the electrostatic chuck, which Toto began mass-producing in 1988. It is a device that uses electrostatic force to adsorb objects, mainly employed to fix silicon wafers during chip manufacturing, while aiding in temperature control and preventing contamination.
Goldman Sachs analysts upgraded Toto's rating from “neutral” to “buy.” They believe that as the supply of high-end and bulk storage chips tightens, Toto’s electrostatic chuck business will directly benefit from the AI infrastructure construction wave.
The Chain Reaction of Tightening Global NAND Supply
Currently, tech giants such as Meta Platforms and Amazon are investing hundreds of billions of dollars in building data centers to support AI services, which has triggered a broad shortage of semiconductor products. This surge in demand has prompted global storage chip manufacturers—including SK Hynix, Samsung, and Kioxia Holdings—to ramp up production, thereby directly driving demand for products from upstream suppliers like Toto.
Fine ceramics are similar in material to the sanitary ceramics used in Toto’s bathroom products, but their strength rivals that of metals. Compared to metals, ceramics are lighter, can withstand higher temperatures, and do not electrically interfere with chip manufacturing equipment. Although their main drawbacks are higher fragility and cost, their physical properties are essential in high-precision chip manufacturing environments.
Cross-Industry Dividends for Japanese Traditional Manufacturers
Toto is not the only Japanese consumer goods giant to profit from the chip frenzy. Japan’s long-standing history in chip production has led many seemingly unrelated companies to build semiconductor-related businesses.
For example, Ajinomoto, the inventor of MSG, uses its expertise in amino acids to produce indispensable chip insulation films (ABF). Cosmetics company Kao, known for selling cleansers, also runs a business that cleans chip wafers.
In Thursday’s trading, Toto’s rise was accompanied by a broad rebound in AI concept stocks. SoftBank, an OpenAI investor, and chip equipment manufacturer Disco both posted gains of over 10%. This trend suggests that investors are digging deeper into the supply chain, seeking undervalued assets that can benefit from the global computing power arms race.
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