A Japanese toilet manufacturer turned out to be one of the surprise winners of the AI boom

The memory supply crisis rages on, fueled by AI datacenters' insatiable appetite for RAM and storage. Consumer prices remain unjustifiably high, and manufacturers themselves are struggling with rising costs from their own suppliers. But the story has taken an unexpected turn: one of the biggest beneficiaries of the AI boom turned out to be Japanese company Toto – the world's largest bathroom appliance manufacturer.

This week, investment management firm Palliser Capital acquired a significant stake in Toto, calling it "The Most Undervalued and Overlooked AI Memory Beneficiary" in a recent presentation. The connection between toilets and artificial intelligence isn't obvious at first glance, but the explanation is actually pretty straightforward.

Toto's advanced ceramic segment contributes more than 50% of the company's total operating profit. It's within this segment that Toto has become "the dominant supplier of electrostatic chucks for Lam Research's cryogenic dielectric etching tools used in 3D NAND channel hole etching." These ceramic chucks hold multiple layers of silicon wafer securely in place during processing at the extremely low temperatures required for precise etching. Palliser Capital argues this makes Toto a key player in next-generation chip production – and has already become one of the company's top 20 shareholders.

Meanwhile, the AI investment frenzy shows no signs of slowing: just this year, Meta, OpenAI, Nvidia, Microsoft, and Amazon have collectively invested or announced investments totaling around $200 billion. Against that backdrop, it's hardly surprising that investors are looking for entry points in the most unexpected places.

But while the big players carve up the pie, everyday consumers are left paying the price in the form of shortages and elevated costs. Phison's CEO has already warned that by the end of 2026, some consumer electronics manufacturers "will go bankrupt or exit product lines." Sony, reportedly, is weighing the possibility of pushing the next PlayStation's launch all the way to 2029. DRAM prices, based on recent signals, may be starting to stabilize or even decline – but it's far too early to call the market crisis over.