This insightful post by David Oks on how Japanese companies do so many things. He cites example of Toto, which manufactures variety of bathroom fixtures, and how it has become a key supplier in the AI supply chain ecosystem.
Since 1988, in a once-obscure corner of the company called the “advanced ceramics division,” Toto has been producing a very particular component called the electrostatic chuck, or the “e-chuck.” The e-chuck is a sort of high-precision ceramic plate, about the size of a steering wheel, that uses electrostatic force to hold a silicon wafer perfectly flat and thermally stable while memory chips are etched into it with bombardments of plasma. Making these components is extraordinarily difficult, since the ceramic body needs to have near-zero particle generation and be polished to submicron flatness: and this means that there are only a few companies in the world that are capable of manufacturing e-chucks reliably. Almost all of them—Shinko Electric, NGK, Toto, Kyocera, Sumitomo Osaka Cement, Niterra—are based in Japan.
For most of its history, the advanced ceramics division was a rounding error on Toto’s balance sheet: the money maker, as it had been since the 1910s, was the toilet and bidet business. But we’re in a new era. Demand for AI is exploding, meaning that demand for the high-bandwidth memory that AI data centers require is exploding, meaning that demand for memory chips is exploding, meaning that demand for e-chucks is exploding. And so Toto’s advanced ceramics division is suddenly the company’s largest business, generating the majority of its operating profit. Toto’s leadership, suddenly awash in AI-driven revenue, announced that they would double down by investing hundreds of millions in expanded electrostatic chuck production: the toilet company had become, quite unexpectedly, a supplier to the semiconductor supply chain.
The Toto story is a fun and interesting illustration of corporate diversification and how strange bets can pay off. But that type of diversification—a toilet company that also produces photocatalytic coating and high-precision components for semiconductors—isn’t really unique to Toto. Practically every company in Japan seems to do a thousand very different things.