Toto: From Toilets to Semiconductors
The well-known Japanese bathroom fixture manufacturer, Toto, recently announced a highly ambitious investment plan. The company will allocate 80 billion yen, equivalent to about Rp 8.8 trillion, to expand its semiconductor business. This investment is planned over the next five years and aims to support the development of next-generation chip manufacturing technology, including semiconductors sized at 1 nanometer (nm).
Promising Growth in the Semiconductor Business
Although Toto is better known as a producer of toilets and various sanitation products, its semiconductor business has recently become one of the company’s largest profit sources. The surge in demand for chips for artificial intelligence (AI) needs in recent years has been the main driver of growth in this division. According to a report from Nikkei Asia, Toto has allocated about 39 billion yen (around Rp 4.3 trillion) from the total planned investment, while the remaining 41 billion yen (around Rp 4.51 trillion) will be realized gradually in line with semiconductor market developments.
Increasing Production Capacity in Japan
The allocated funds will be used to increase production capacity at two of Toto’s main facilities located in Oita and Fukuoka Prefectures, Japan. Currently, both factories are operating at full capacity to meet semiconductor market demand. If market demand continues to rise and cannot be met with this investment, Toto is likely to consider building new factories to sustain its business.
Innovation in Research and Development
Toto is not only focusing on increasing production capacity but is also actively developing materials designed to support the manufacturing of next-generation logic chips. This research and development (R&D) process is conducted at their facility in Kanagawa Prefecture, near Tokyo, with a special focus on 1 nm semiconductor technology. For context, the world’s largest chip manufacturer, TSMC, currently produces logic chips using 2 nm process technology.
Toto’s semiconductor materials business had experienced losses for several years. However, since 2020, with the rising demand for AI chips, the situation has reversed. Ahead of the fiscal year ending March 2025, Toto’s New Domain Business division, which manages the semiconductor business, is expected to achieve sales of 67.4 billion yen (around Rp 7.43 trillion). This figure represents a significant increase of 34 percent compared to the same period the previous year. Additionally, the division’s operating profit also rose by 42 percent, reaching 28.9 billion yen (around Rp 3.18 trillion).
With this bold move, Toto demonstrates that it is not only confined to the bathroom fixture industry but is also ready to compete in the high-tech market with the right innovation and investment.
