Ajinomoto, the Japanese multinational known for its food industry, announced an additional investment of 25 billion yen (approximately 166 million dollars) to increase its production capacity of Ajinomoto Build-up Film (ABF) by 50%, a crucial material in the manufacturing of substrates for advanced chips.
ABF: A Key Material in the Semiconductor Industry
The ABF is an insulating film developed by Ajinomoto based on its expertise in fine chemicals. This material is essential in the production of substrates for GPUs and CPUs, thanks to its high durability and low thermal expansion, critical characteristics for packaging next-generation semiconductors.
Currently, Ajinomoto dominates over 95% of the global ABF market, establishing itself as an indispensable supplier for chip manufacturers such as NVIDIA, Intel, and AMD.
Strategic Investment to Meet Growing Demand
The company had already invested 25 billion yen in the past two years to expand its production capacity. With this new capital injection, it aims to respond to the rapid growth in demand in sectors like artificial intelligence, data centers, and high-performance computing (HPC).
According to Nikkei, Ajinomoto’s functional materials segment — which includes ABF — accounted for 20% of its profits in the fiscal year ending in March 2024. The company expects the benefits from this division to increase by 35% this year, reaching 37.2 billion yen (approximately 247 million dollars).
Global Expansion and Potential Construction of New Plants
Shigeo Nakamura, president of Ajinomoto, pointed out that the company is evaluating the construction of new plants to meet future demand. Furthermore, it anticipates that sales of electronic materials will grow at an annual rate of over 10% until 2030.
This move reinforces Ajinomoto’s strategy to diversify its business beyond food, establishing itself as a key player in the semiconductor supply chain.
References: Nikkei and Technews Taiwan