Ajinomoto Bets 25 Billion Yen on Dominant AI Chip Material

Ajinomoto Build-up Film, or ABF, is a critical insulating material used in advanced chip substrates, with Japan’s Ajinomoto holding a dominant position in the market. Surging demand for AI accelerators has tightened access to high-end substrate materials, making ABF allocation strategically important. China is promoting domestic substitutes, but its most advanced AI chip packaging still depends heavily on imported materials.

As of Aug. 26, 2026, Ajinomoto was reported to be prioritizing overseas customers that make substrates for high-end AI accelerators and cutting ABF supplies to China by about 30%. Chinese manufacturers are accelerating qualification of alternatives including CBF and NBF, though these materials are not yet ready to fully replace imported ABF in flagship products. Taiwanese substrate suppliers could benefit from redirected orders.

Beyond its core food business, Ajinomoto produces ABF, an insulating material used in advanced semiconductor packaging substrates. The material is widely used in AI chips and server processors, and the company has a global market share of about 95%. Its difficult-to-replace position in the supply chain has increasingly led investors to view Ajinomoto as an AI-related stock, while its pricing strategy has implications for packaging costs and its earnings outlook.

As of July 2026, British activist investor Palliser Capital had recommended that Ajinomoto raise ABF prices by more than 30% to strengthen profits as AI chip demand expands. Reports did not disclose the date of the proposal, the value of Palliser’s stake or the estimated gains. Ajinomoto remains cautious about direct price increases and has not announced a timetable for any adjustment.