Ajinomoto Controls 95% of Global AI Chip Insulating Film Market

Ajinomoto's Ajinomoto Build-up Film (ABF) has become critical in the semiconductor industry, representing approximately 95% of the global market. Originally launched in 1999, the ABF is essential for isolating layers within semiconductor substrates, preventing electrical shorts in high-performance chips, including AI GPUs from manufacturers like Nvidia.

Due to a surge in demand for ABF, Ajinomoto announced a 30% price increase effective Q3 2026. The company plans to build a third ABF factory in Gifu, Japan, with production starting in 2032, highlighting the slow response to rising demand. This concentration of supply could impact the availability of AI chips, raising concerns about future supply chain vulnerabilities.