Artificial intelligence has fuelled a global race to build faster chips, larger data centres and more powerful computing systems, propelling companies like Nvidia into the spotlight. Yet some of the biggest beneficiaries of the AI revolution are businesses that few people would associate with cutting-edge technology. In Japan, manufacturers known for making toilets, glass fibre and food seasonings have quietly become indispensable to the semiconductor industry. Rather than designing AI chips or developing large language models, they produce specialised materials without which advanced processors could not be manufactured or packaged. As AI investment surges worldwide, these decades-old companies are emerging as some of the industry’s most surprising winners.
Why Japanese companies making toilets, glass fibre and seasonings are winning the AI boom
The AI boom is about much more than designing advanced processors. Every AI chip passes through a complex manufacturing process that depends on specialised materials, precision engineering and advanced packaging technologies. This has created opportunities for companies supplying niche products that are difficult to replace. Japan has spent decades developing expertise in advanced ceramics, speciality chemicals, industrial glass and semiconductor materials, making many of its traditional manufacturers critical links in the global chip supply chain. As demand for AI servers and high-performance semiconductors grows, investors are increasingly recognising these firms as “second-order AI beneficiaries”, companies that profit from AI without directly building AI systems.
How Toto’s expertise in ceramics found a place in chipmaking
Toto is best known worldwide for its Washlet bidets and premium bathroom products. Few consumers realise the company has also operated an advanced ceramics business since the 1980s. One of its most important semiconductor products is the electrostatic chuck, a highly specialised ceramic plate that holds silicon wafers securely during chip fabrication.These components must withstand extreme heat, powerful electric fields and corrosive chemicals while maintaining microscopic precision. Without electrostatic chucks, manufacturers would struggle to produce the advanced memory chips used in AI servers and high-performance computing systems. The growing importance of these products has prompted investors to look beyond Toto’s consumer business and recognise the value of its semiconductor materials division.
Nittobo’s glass fibre is helping build the AI infrastructure
Founded more than a century ago as a textile manufacturer, Nittobo has evolved into one of Japan’s leading producers of specialised glass fibre. Its products are used in semiconductor package substrates, AI servers and other high-performance electronic equipment.As AI processors become more powerful, they generate more heat and require increasingly sophisticated packaging materials. Nittobo’s glass fibre improves the strength, dimensional stability and thermal performance of semiconductor substrates, enabling chips to operate more efficiently under demanding conditions. Although invisible to consumers, these materials have become essential as technology companies invest billions of dollars in expanding AI data centres across the world.
How a seasoning company became indispensable to modern AI chips
Ajinomoto is widely recognised as the company behind monosodium glutamate (MSG) and a range of food seasonings, but it also occupies a unique position in the semiconductor industry. Building on decades of research into amino acid chemistry, the company developed Ajinomoto Build-up Film (ABF), an insulating material used in advanced chip packaging.ABF allows manufacturers to create ultra-fine electrical connections between processors and their substrates while maintaining speed, reliability and heat resistance. Modern AI chips require increasingly complex packaging technologies, particularly as high-bandwidth memory is integrated alongside powerful graphics processors. Ajinomoto dominates the global market for ABF, making it one of the most important suppliers in the AI hardware ecosystem despite its reputation as a food company.
Why advanced packaging has become as important as advanced chips
For many years, progress in semiconductors focused mainly on shrinking transistors and increasing processing power. The AI era has shifted attention towards advanced packaging, which determines how chips, memory and other components are connected within a single system.Today’s AI processors contain billions of transistors and consume enormous amounts of power. They must transfer vast amounts of data at extremely high speeds while efficiently managing heat. This has increased demand for specialised materials such as ceramic components, insulating films and high-performance glass fibre. As a result, companies supplying these technologies have become just as important to the AI industry as many of the firms designing the chips themselves.
Investors are discovering AI’s hidden winners
The success of Toto, Nittobo and Ajinomoto reflects a broader change in how investors view the AI economy. Rather than focusing solely on chip designers, they are increasingly searching for companies that supply the critical materials underpinning semiconductor manufacturing. Activist investors have also encouraged some Japanese firms to highlight their technology businesses more prominently, arguing that these operations are undervalued because the companies are still associated primarily with consumer products.This shift has helped boost the share prices of several traditional manufacturers, with analysts describing them as hidden or second-order AI winners whose fortunes are closely tied to the rapid expansion of AI infrastructure.
Japan’s decades of materials expertise are paying off
Although Japan no longer dominates global semiconductor manufacturing as it did in the 1980s, it remains a world leader in specialised materials used throughout the chip production process. Years of investment in ceramics, industrial glass, speciality chemicals and precision manufacturing have given Japanese companies an advantage that is difficult for competitors to replicate.The stories of Toto, Nittobo and Ajinomoto illustrate how innovation often develops in unexpected ways. Expertise originally built for bathroom fixtures, textiles and food production has become essential for powering the next generation of artificial intelligence. As governments and technology companies continue investing hundreds of billions of dollars in AI infrastructure, these traditional manufacturers are proving that some of the biggest winners of the AI revolution are not the companies making AI chips, but the ones quietly supplying the materials that make those chips possible. Go to Source
