Is Japanese manufacturing in the toilet? Absolutely not — though it might be the first place to look to understand how the country’s firms are changing.
One of the most surprising stories in corporate Japan in recent months has been the emergence of semiconductor materials as a significant profit driver at the most unlikely of companies: Toto, better known as the maker of washlet high-tech toilets.
While the firm has been making headlines since the pandemic as the popularity of its heated, water jet-equipped thrones grew overseas, a far smaller division that makes high-quality ceramics for the semiconductor industry has been growing to contribute more than 30% of Toto’s profit. The segment has an enviable margin of more than 40%, compared with just 5% in its mainstay sales of toilets in Japan. While the company has been involved in the semiconductor business for decades, the segment has only recently become a profit center.
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