TOTO Touted as Undervalued AI Stock on Semiconductor Ceramics, Shares Surge 40% This Year

TOTO makes more than bathroom fixtures. It has extended a century of ceramics expertise into semiconductor etching equipment, supplying heat- and corrosion-resistant components such as electrostatic chucks that hold wafers in place. These products are used in the manufacture of AI chips and high-layer-count 3D NAND. As AI data centers drive memory demand, the company’s low-profile ceramics business has emerged as a new profit engine.

British activist fund Palliser Capital took a stake in TOTO in February 2026 and called it the most undervalued beneficiary of AI memory growth. Goldman Sachs also upgraded the stock to “buy,” helping lift the shares by nearly 40% in the first two months of the year. Advanced ceramics generated ¥27 billion in operating profit in the year ended March 2026, accounting for 55% of the group total. On June 21, reports said TOTO would invest ¥80 billion, or about NT$15.7 billion, to expand capacity over the next five years.