While investors have spent much of the past year chasing semiconductor companies at the center of the AI boom, some of the market’s strongest performers have come from unexpected corners of Japan’s industrial economy.

Toto, Nittobo and Ajinomoto are better known for toilets, glass fiber and seasoning than advanced computing. Yet each has carved out a critical role in the semiconductor supply chain by applying decades of manufacturing expertise to AI infrastructure. Their shares have climbed 78%, 63% and 61%, respectively, this year as demand for semiconductor equipment and advanced chip packaging continues to grow.

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From Legacy Businesses To AI Infrastructure

Rather than reinventing themselves, all three companies have adapted long-established materials science and manufacturing capabilities to serve the AI industry.

Toto supplies ceramic electrostatic chucks used in semiconductor production equipment. Nittobo manufactures advanced glass fiber for semiconductor package substrates, while Ajinomoto produces ABF, an insulating film essential for packaging high-performance chips used in data centers and AI applications.

The AI boom is driving demand throughout the semiconductor supply chain, creating new growth opportunities for businesses once considered niche parts of much larger industrial groups.

Toto: A Ceramics Business Finding New Scale

Toto remains best known for its housing and bathroom products, but its advanced ceramics division has become an increasingly important source of earnings. The business reported a 34% increase in annual revenue and a 42% rise in operating profit for the fiscal year ended March 31, offsetting weaker results in the company’s core housing operations.

The company entered the semiconductor industry in 1988, when it began producing electrostatic chucks that hold silicon wafers in place during chip manufacturing. The components help improve production yields for advanced semiconductors, positioning Toto to benefit from investment in AI, data centers, IoT and digital transformation.

Despite the rapid growth of its ceramics business, Toto says it has no plans to shift away from its traditional operations. Instead, it views its housing business as a stable foundation while expanding its higher-growth semiconductor business.

Nittobo: Electronic Materials Become The Growth Engine

Electronic materials have become central to Nittobo’s growth strategy. Its T-glass product, introduced in 1984 for printed circuit boards and electronic components, has benefited from rising demand for AI hardware.

The company says AI-related semiconductor demand is shaping investment, research and hiring decisions. That strategy has translated into stronger results: net sales in the electronic materials segment rose 20.4% year on year, while operating profit increased 39.7%.

According to CNBC calculations, the segment generated about 91% of Nittobo’s total net sales growth in the latest fiscal year. Operating profit increased by 5.5 billion yen, or roughly $34 million, exceeding the company’s overall operating profit growth. Nittobo expects demand for specialty glass used in servers, networking equipment and semiconductor package substrates to remain strong and plans to expand production capacity.

The company continues to develop new industrial applications for its traditional glass-fiber business, suggesting AI is strengthening rather than replacing its broader manufacturing portfolio.

Ajinomoto: An ABF Advantage

Ajinomoto remains best known as a food company, but one of its most valuable technologies sits far beyond the supermarket aisle.

Its ABF (Ajinomoto Build-up Film) is a semiconductor insulation material originally developed from a byproduct of the company’s MSG manufacturing process. Introduced commercially in 1999, it is now widely used in packaging high-performance processors.

As semiconductor packaging becomes more complex, demand for ABF has continued to grow. Ajinomoto expects AI, 5G and other advanced technologies to support further expansion.

Although the company does not report ABF as a standalone business, its fiscal 2025 results highlight its growing importance. The Healthcare and Others division, which includes ABF, posted revenue growth of about 4% and a 45.1% increase in business profit, driven by stronger electronic materials sales. The segment accounted for more than one-third of total company profit and surpassed the frozen food business in both revenue and profit.

Ajinomoto expects continued expansion of its ABF business as part of its broader AminoScience strategy, where the company aims to balance industrial and food operations over the long term.

The Broader Lesson For Investors

The AI boom is extending well beyond chip designers and cloud providers. As semiconductor supply chains become more specialized, companies with decades of expertise in ceramics, specialty glass and advanced materials are finding new sources of growth.

For investors, some of the strongest AI opportunities may lie in businesses that were never considered technology companies in the first place. Japan’s industrial sector shows that long-established manufacturing expertise can become a competitive advantage in the next generation of computing.