The AI boom isn’t just lifting chipmakers and big tech. In Japan, profits are funneled to toilet manufacturers and major seasoning companies.
As demand for AI chips soars, investors are flocking to companies located within the semiconductor supply chain, even those best known for making toiletries and soup stock.
TOTO, a toilet maker known for its high-tech bidets and heated toilet seats, is attracting attention from investors. The company makes electrostatic chucks, a critical component used in the production of NAND memory chips.
Memory prices have soared in recent months, driven by AI-related demand.
Last week, UK-based activist fund Palliser Capital called TOTO “the most undervalued and overlooked beneficiary of AI memory,” as reported by Bloomberg and the Financial Times.
The toilet maker’s stock rose more than 5% on Tuesday after news broke that Palliser Capital was buying a stake and pushing TOTO to move into the chip parts business. The company’s stock price has increased more than 54% over the past year.
It’s not just Toto. Ajinomoto, the Japanese food giant best known for its umami seasonings and dashi ingredients, is taking an unlikely approach to AI infrastructure. The company produces insulating materials used in advanced semiconductor packaging.
Ajinomoto’s latest financial report shows strength beyond its core food business. For the nine months to December, the company reported an 8.9% increase in net profit and a 5.6% year-on-year increase in operating profit. The company said in its February earnings call that part of the gain was driven by its “Healthcare and Other” segment, which includes electronic materials used in semiconductors.
After Ajinomoto announced its financial results on February 5, the company’s stock price rose 13%. The company’s stock price has increased more than 56% over the past year.
Not all non-tech companies are benefiting equally from the AI boom. Daikin, best known worldwide for its air conditioners, supplies high-purity chemical materials used in semiconductor manufacturing. It recently lowered its outlook, citing uncertainty over U.S. tariffs as a drag on demand.
The Japanese air-conditioning maker has lowered its operating profit forecast by about 5% to 413 billion yen ($2.6 billion) for the fiscal year ending in March.
In its February financial report, the company said, “Operating income was significantly affected by the decline in semiconductor demand, and decreased by 44.6% year-on-year to 18,102 million yen.”
“Net sales of fluoropolymers decreased year-on-year despite the group’s focus on capturing new demand in the data center sector. This was due to the overall impact of the stagnation in the construction markets in the US and China and the slow recovery in semiconductor demand,” it added.
The company said it plans to cushion the blow from price increases and cost cuts.
Following the results, Daikin shares fell as much as 8.4% on the Tokyo market.
