Ajinomoto leverages AI chip demand to drive revenue and price increases

Ajinomoto, the Japanese food seasoning manufacturer, has become a critical component of the AI hardware supply chain through its Ajinomoto Build-up Film (ABF). This thin resin layer provides essential electrical insulation within the substrates of high-performance processors used by major chipmakers including Nvidia, Intel, and AMD.

Ajinomoto currently controls over 95% of the ABF market. Following a 127% increase in quarterly revenue, the company has raised its prices by approximately 30% and lifted its full-year forecast. This price adjustment follows recommendations from activist shareholder Palliser Capital. Analysts suggest the price hike could increase substrate costs across the semiconductor industry by 3% to 6%.

To address projected supply-demand gaps—which are expected to reach 42% by 2028—Ajinomoto has committed over 25 billion yen (approximately $150 million) to increase production capacity by 50% by 2030. A new production plant in Japan is currently slated to begin operations around 2032.