Japanese toilet manufacturer TOTO has extensive experience in ceramics design—processes that could also be used to manufacture the next generation of computer chips.

Japan’s advanced toilets and washlets have gained popularity worldwide, particularly in the United States in recent years—driven by hygiene awareness, social media campaigns, and perhaps even TV’s South Park, which parodied the devices two years ago. Japanese toilet manufacturer TOTO’s Washlets have seen their sales in America double since 2012, also driven by the notorious toilet paper shortage of the early COVID-19 era.

Yet in early 2026, it isn’t the company’s bidets that have suddenly excited investors. Instead, it is the company’s advanced ceramics business, which investors have realized might have some usefulness in the design of advanced computer chips.

The Financial Times first reported that UK-based activist fund Palliser Capital took a huge stake in TOTO, describing it as “the Most Undervalued and Overlooked AI Memory Beneficiary.”

What Do Toilets Have to Do with AI?

The most obvious and therefore most asked question has been what exactly TOTO’s washlets have to do with artificial intelligence (AI)?

In a nutshell, not much—except for the processes used to etch the materials.

Palliser Capital is looking beyond the toilets and instead, the ceramics and processes involved in the production of bathroom appliances. That might suggest that TOTO has suddenly developed a new technology, but that’s not quite the case. The fund simply drew from information readily available on the TOTO corporate website.

“TOTO’s Advanced Ceramics Division has provided industrial ceramics products for over thirty years,” the website stated, adding, “We provide optimized solutions to meet each customer’s individual needs as well as products that contribute to society at large, drawing upon the many advanced technologies (materials development, design, production technology, evaluation and analysis) that we have cultivated through years of proven experience in such cutting-edge fields as the semiconductor and optical communications industries.”

Getting Past the Jargon

TOTO’s ceramics already account for more than 50 percent of the company’s total operating products, a point Palliser Capital understands. In the process, TOTO has become a “dominant supplier of electrostatic chucks for Lam Research’s cryogenic dielectric etching tools used in 3D NAND channel hole etching.”

That might not sound all that impressive. To most people, it probably doesn’t even mean anything. However, as Yahoo! Finance/PC Gamer explained, the ceramic chucks can hold multiple layers of silicon wafer in place. This is where it starts to get interesting.

“These materials have to withstand thermal stress, minimize contamination, and be engineered to extremely tight tolerances. Toto’s advanced ceramics catalog demonstrates the company’s expertise,” Tom’s Hardware also noted.

In plain English, ceramics are a vital part of advanced semiconductors—and TOTO’s ability to make equipment that manufactures them within extremely narrow parameters means that it can make a major contribution to the future of chip design. Not bad for a toilet company!

With this new guidance, TOTO will likely play a role in the production of next-generation ceramic processors now used in AI data centers. This is a proven technology, and it is something that TOTO does very well. Soon, it could be a game-changer not in bathrooms around the world, but in those AI data centers.

TOTO Didn’t Understand Its Own Importance

The UK investment fund also understood that most investors likely had little to no idea what any of this means, and is trying to highlight that TOTO needs to do a better job of touting what it can do.

“Palliser is pushing Toto to do a better job explaining this segment to the market, streamline capital allocation,” Tom’s Hardware added. Wall Street and other markets are only now beginning to see what others have missed.

“Goldman Sachs and other research desks have talked up the profit potential tied to these components, even lifting ratings in the past year based on the assumption of a rebounding NAND market.”

What remains clear is that even a cartoon can explain why consumers were excited—perhaps even too excited—by Japan’s high-tech toilets, even as the real magic was in the company’s ceramic processing.

About the Author: Peter Suciu

Peter Suciu has contributed over 3,200 published pieces to more than four dozen magazines and websites over a 30-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a contributing writer for Forbes and Clearance Jobs. He is based in Michigan. You can follow him on Twitter: @PeterSuciu. You can email the author: Editor@nationalinterest.org.

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