Source: Fortune
Summary
Japans largest bidet maker, Toto, is investing ¥30 billion in capacity expansion and R&D for semiconductor ceramics, driven by AI chip demand. The company has been making chip components for 40 years and recently surged 18% on record annual earnings. Toto’s ceramics division delivered ¥28.9 billion in operating profit, more than half of the company’s total. The move comes after Allbirds, a sustainable shoe company, rebranded as NewBird AI and saw its stock surge 582% in a single session. Unlike Allbirds, Toto is not rebranding itself, but rather expanding its existing business.
Our Reading
The numbers tell one story. Toto’s expansion into AI chip components is a strategic move to capitalize on growing demand. The company’s ceramics division has been a significant contributor to its operating profit. Toto’s investment in R&D and capacity expansion is expected to drive another record year. The company’s move is a testament to the “Allbirds Effect,” where anything related to AI gets a bid. However, unlike Allbirds, Toto has been building chip components for 40 years and is not rebranding itself. “The AI chip supply chain is filled with near-monopolies, and Toto is one of them.”
Author: Evan Null
