Ajinomoto’s Critical Chip Film, ABF, Faces Supply Test as Escalating AI Demand Mounts Pressure for Price Hikes

June 20, 2026

digitimes Taiwan

Overview

Global AI chip demand is putting new pressure on the supply of Ajinomoto Build-up Film (ABF), a key material for advanced semiconductor packaging. Ajinomoto faces increasing pressure to raise ABF prices, making its pricing strategy a focal point for the industry. This situation indicates Ajinomoto is at a critical juncture in balancing supply capacity with the surging demand.

In Depth

Key Findings

As global demand for AI chips surges, Ajinomoto Build-up Film (ABF), an indispensable material for advanced semiconductor packaging, is facing a significant supply challenge. This situation is intensifying pressure on Ajinomoto, the primary supplier of ABF, regarding potential price increases, drawing considerable attention from the entire semiconductor industry to the company’s future pricing strategy.

Technical / Clinical Details

ABF’s Criticality and Demand: ABF is an insulating film utilized in multi-layer IC package substrates for high-performance CPUs, GPUs, and AI accelerators. Its superior dielectric properties, thermal stability, and thin-film capabilities play a vital role in enhancing AI chip performance and miniaturization. The evolution of AI is accelerating the adoption of chiplet packages with High Bandwidth Memory (HBM) and 2.5D/3D stacking technologies, driving unprecedented demand for ABF.
Background of Supply Shortage: Ajinomoto has held a near-monopoly in the ABF market for many years, but the rapid increase in AI demand raises the possibility that existing production capacity may quickly become insufficient. Semiconductor manufacturing processes are highly complex, and material supply often becomes a bottleneck, with ABF being no exception.
Pressure for Price Hikes: A situation where demand outstrips supply typically leads to price increases. Semiconductor manufacturers tend to be willing to pay a premium to ensure a stable supply of critical materials. Ajinomoto is thus faced with the difficult decision of balancing long-term customer relationships with short-term revenue opportunities in this market environment.

Background & Context

The semiconductor industry is in a constant state of flux due to geopolitical risks, pandemics, and accelerating technological innovation. The rise of the AI sector, in particular, is exerting new pressures on the entire supply chain, where material manufacturers’ supply capacity and pricing directly impact the cost and time-to-market of end products. Ajinomoto’s ABF, due to its performance and significant market share, is considered a ‘hidden cornerstone’ in the semiconductor industry, and its developments have ripple effects across the entire sector.

Strategic Significance & Outlook

Discussions regarding potential ABF price increases by Ajinomoto are drawing close attention to what strategic decisions the company will make next. Whether it chooses further massive production capacity expansion or demand adjustment through price revisions, its decision will significantly impact the future supply and cost structure of AI chips. This situation serves as an important case study illustrating the challenges faced by semiconductor material suppliers and how they adapt to fluctuating market needs while maintaining advanced technological superiority.

Source: https://www.digitimes.com/news/a20260616VL220/demand-chips-materials.html

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