Is Japanese manufacturing in the toilet? Absolutely not ¡ª 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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