These Japanese AI winners don’t make chips. They make toilets, glass fiber and seasoning
A worker works at Toto Ltd. in Kitakyushu, Fukuoka Prefecture, Japan, on Thursday, May 28, 2026. He is inspecting the toilet unit in his factory.
Bloomberg | Bloomberg | Getty Images
At a time when investors’ attention is on the semiconductor industry, some hidden gems in businesses quite different from high tech have emerged as market winners, taking advantage of the AI boom.
Toto is best known for its luxury toilets, Nittobo produces textiles and fiberglass, and Ajinomoto produces MSG spices. Its shares are up 78%, 63% and 61%, respectively, this year as they use their core technology to leverage the AI supply chain.
Toto produces ceramic electrostatic mirrors used in semiconductor manufacturing equipment, while Nittobo supplies advanced glass fiber used in semiconductor package substrates.
Ajinomoto produces an insulating material known as “structure film” or ABF, which is used in semiconductor packaging for high-performance computers and data center servers.
All three companies reported sharp growth in business tied to semiconductor demand for their full fiscal years ending March 31, underscoring the impact of the AI boom.
Toto: I’m unplugging it
The company’s advanced ceramics business enjoyed higher profit margins than the residential equipment segment, driven by IoT, digital transformation, artificial intelligence and demand from data centers for advanced semiconductor equipment.
Toto, himself full year resultsIt said its 100-year-old basic residential equipment unit saw a decline in sales and profits, but that was offset by revenue and profit increases in its advanced ceramics business.
The segment saw a 34% increase in annual revenue and a 42% increase in operating profit; This led the entire company to almost single-handed growth in the financial year.
The company’s expertise in ceramics led it to produce electronic holders for semiconductor manufacturing equipment in 1988.
These mirrors hold silicon wafers in place during the etching process inside semiconductor manufacturing equipment. Toto says its ceramics contribute significantly to increasing the production efficiency of advanced chips.
“However, we do not view one segment as superior to another. Our Advanced Ceramics Business Unit is a high-growth area, but we have endured long-term deficits throughout its 40-year history before getting to this point,” the company said in an email to CNBC.
It plans to grow in both segments and “maintain a balanced ratio” for sustainable overall growth, and has “absolutely no plans” to move away from its core residential equipment business as it provides a stable basis for the company’s balance sheet while the chip sector remains volatile.
Nittobo: wants to experience the explosion
Nittobo said electronic materials are already a mainstay as it continues to develop markets for its traditional fiberglass business. The T-glass product, introduced in 1984, is used in printed circuit boards and electronic components.
The company told CNBC that T-glass and other electronic materials are the “pillar” of its growth over the next decade, and that demand for AI semiconductors is changing the way it allocates capital spending, research and development, and human resources.
Nittobo results Tell the story: The company said factors such as strong demand for AI servers as well as strong sales of “Special Glass” are driving sales and profits of its electronic materials business segment.
In the electronic materials business, net sales increased 20.4% year-on-year and operating profit increased 39.7% compared to the previous fiscal year.
According to CNBC’s calculations, this segment contributed nearly 91% to Nittobo’s net sales growth last fiscal year; The segment’s profits increased by 5.5 billion yen (about $34 million), more than the company’s operating profit increase of 4.4 billion yen.
Glass fiber has been used in many applications over time, including composite materials for plastic reinforcement, the company said, but the company now sees “a very strong likelihood that electronic materials will continue to be its most important business in the future.”
In its results statement, Nittobo said it “expects to see strong demand for Specialty Glasses used in electronic materials, particularly for servers, network equipment, and semiconductor package substrates in data centers, and will proactively strengthen efforts to expand production capacity to meet this demand.”
While the semiconductor segment is becoming increasingly lucrative for the company, it is also expanding applications for its traditional glass fiber businesses, including composites and industrial materials.
Ajinomoto: ABF support
While food remains its primary focus, Ajinomoto has found applications for its products, such as producing ABF insulating film used in semiconductors.
According to Ajinomoto’s website, a byproduct from the MSG production process helped the company develop technologies that eventually led to the creation of ABF.
The product was introduced in 1999 and is currently used for high-performance semiconductors, including CPUs.
Ajinomoto food company’s monosodium glutamate (MSG) products are displayed at a supermarket in Tokyo on January 20, 2020.
Behruz Mehri | Afp | Getty Images
Ajinomoto says ABF’s role is becoming more important as semiconductor packaging becomes more complex, and artificial intelligence, 5G and other advanced technologies will continue to drive semiconductor demand.
The company did not respond to CNBC’s request for comment.
Ajinomoto does not separate ABF into its own segment, but full year results It said its “Healthcare and Others” segment, which includes ABF, saw revenue growth of about 4%, and business profits rose 45.1% year-on-year, due in part to higher revenue from electronic materials.
This segment, which accounts for more than a third of the company’s profits this fiscal year, has surpassed even Ajinomoto’s frozen food segment in terms of revenue and profit.
“We anticipate that growth centered on ABFTM products will continue in high value-added and advanced technology areas.” the company said.
The company said it aims to achieve a “one-to-one balance” between its food business and its AminoScience business, with ABF contributing to the latter.
