Jaden Schafer

they have to do a lot of thermal stress and they have to also prevent contamination they're also supposed to maintain like exact tolerances and total's lineup includes um you know like air bearings they do bonding capillaries and a lot of other things i think there's some structural components for high precision semi-conductor equipment that they work on and right now investors are starting to actually realize this of course we have this activist investor that's going off on it but i think this isn't just like a side project for toto there's some recent reporting that suggests that advanced ceramic business

for Toto accounts for about 40% of their operating profit.

And I think even as the brand, right, if this is known globally with toilets, that's what everyone would associate Toto with.

But their AI data centers are starting to, like the AI data centers that they're supplying are starting to have a massive outsized demand for memory.

There's a tightening supply chain, which is pushing up wafer fab utilization.

And I think because of that dynamic, this is feeding directly into demand for the equipment.

and components that are required to manufacture those chips.

So Toto's been already like working on this.

They've already been kind of making those chips.

It was sort of a side thing.

And all of a sudden, this is becoming a major part of their business.

I mean, 40% of their operating profit, and nobody's talking about it until, of course, this activist investor takes a big stake, starts, you know, very vocally discussing this.

And now, of course, their stock price has been going up.

So Pallister is basically urging management of the company

Like, look, guys, you have to communicate the value of this segment better.

You need to sharpen capital allocation.

And you have to deploy your approximately, they have about 76 billion in net cash.

And that's in Japanese won, of course.

But he's saying, look, you guys have to deploy this more aggressively, potentially expand the ceramics capability ahead of rivals.

And I think there's a bunch of different analysts at firms.