Ajinomoto dominates 95% of global ABF semiconductor film market

Ajinomoto, the Japanese chemical and food giant, holds a dominant 95% global market share in Ajinomoto Build-up Film (ABF), an essential insulating material used in high-end semiconductor packaging for CPUs and GPUs. The company’s electronic materials division has seen significant growth, contributing approximately 32% of group profits from just 8% of total revenue, driven largely by the demand for AI accelerators.

Reports indicate that Ajinomoto may reduce ABF supply to Chinese customers by 30% to prioritize core overseas clients, such as NVIDIA, AMD, and Intel. This potential supply tightening has prompted China to accelerate domestic substitution efforts. Chinese firms, including Huazheng New Material, Lotus Holdings, and Hongchang Electronics, are developing alternative films like CBF, NBF, and GBF to enter the supply chain, targeting major players like Huawei Ascend.

Despite these efforts, Chinese domestic alternatives face challenges in high-layer count packaging required for flagship AI chips and must undergo rigorous reliability testing that can take one to three years. To maintain its market position, Ajinomoto is investing heavily in capacity expansion, with plans to increase production by 50% by 2030 and constructing a third factory in Kani City, Japan, expected to operate by 2032.