Japanese bathroom fixtures maker Toto Ltd. is ramping up its semiconductor equipment parts business, targeting a 25% increase in operating profit from the segment by fiscal 2026.
The company expects its ceramics division to generate 20 billion yen ($130 million) in operating profit for fiscal 2024, with margins approaching 40% — significantly higher than the projected 7% for overall operations. The unit specializes in electrostatic chucks, critical components that secure silicon wafers during circuit etching.
Toto has invested heavily in the business, spending 11.8 billion yen on a new production facility in Oita prefecture in 2020 and expanding its ceramics workforce by about 20% over the past four years. Management is already considering another factory to meet growing demand.
The shift comes as Toto faces headwinds in its core markets, with Japan’s housing sector contracting and Chinese operations cooling. The company competes with domestic rival Shinko Electric Industries and U.S.-based Applied Materials in the semiconductor components space.
The ceramics unit, which struggled for profitability since its 1980s launch, has found success by applying expertise from toilet manufacturing. The company used high-precision microscope technology, originally developed to reduce dirt accumulation on toilet surfaces, to improve the quality of its semiconductor components.
Toto aims to expand into downstream chip processing as three-dimensional stacking technology creates new opportunities for ceramic applications.
