The Freak Show

Shares of Japanese toilet maker Toto gained the most in five years after booming memory demand excited expectations of growth in its little-known chipmaking materials operations.
The stock surged as much as 11%, its steepest rise since February 2021, after Goldman Sachs analysts said Toto’s electrostatic chucks used in NAND chipmaking will likely benefit from an artificial intelligence infrastructure buildout that’s tightening supplies of both high-end and commodity memory.

Analysts Sachiko Okada and Sayako Tominaga raised their rating for Toto to buy from neutral, citing hopes for "significant profit growth” from the firm’s chuck-making business. The memory industry’s tight supply-demand environment will be a tailwind, they said. Toto expects AI data center construction to continue to raise demand for its electrostatic chucks, a representative said.

Known for its heated toilet seats, the maker of "washlet" cleansing toilets has for decades been part of the semiconductor and display supply chain via its advanced ceramic parts and films. Its electrostatic chucks — which it began mass producing in 1988 — are used to hold silicon wafers in place during chipmaking while helping to control temperature and contamination, according to the company. The company’s new domain business accounted for 42% of its total operating income in the fiscal year ended March 2025, Bloomberg-compiled data shows.

The likes of Meta Platforms and Amazon.com are investing hundreds of billions of dollars into data centers for AI services, triggering widespread shortages of semiconductors. That’s spurring memory makers around the world to ramp up production, from SK Hynix to Samsung Electronics and Kioxia Holdings, and lifting demand for products such as Toto’s.

Fine ceramics are similar to the sanitary ceramics used in Toto’s toilets, but with strength comparable to metals. Ceramic is lighter than metal and able to resist higher temperatures without interfering electrically with chipmaking tools, but are more brittle and costly.

Japan’s long history in chip production has led many companies, including unlikely names like consumer product manufacturers, to build out semiconductor-related operations. MSG seasoning inventor Ajinomoto produces chip insulating films — a business that arose from its command of amino acids. Cosmetics firm Kao, which sells facial cleansers, also has a chip wafer cleaning business.

Thursday’s gains helped make ceramics the Topix’s best-performing sector in the afternoon in Tokyo. The toilet firm’s rise came amid a broad rally in AI shares, with OpenAI investor SoftBank and chip tool maker Disco climbing over 10%.