Ajinomoto Increases Price of ABF Films by 30%

The key raw material for AI chip packaging is about to face a significant price increase.

According to DIGITIMES, Ajinomoto has notified integrated circuit substrate manufacturers that the price of its core product, ABF filler film, will be increased by 30%, and the new price is expected to take effect in the third quarter of 2026. Taiwan's packaging substrate manufacturers have confirmed receiving the aforementioned notice.

Based on an estimation of the cost structure of ABF substrates used for AI GPUs and ASICs, if the price increase is implemented, it will directly push up the cost pressure of the substrate materials, driving the overall substrate pricing with an additional 3% to 6% upward adjustment space.

What is ABF and why is it so critical

Ajinomoto Build-up Film (ABF) is a high-performance insulation film in advanced chip packaging substrates, responsible for isolating the signal layers between the chip and the circuit board to prevent high-frequency signal interference. This material, initially created by Ajinomoto in 1999 from a byproduct of the monosodium glutamate manufacturing process, is widely used in personal computers, data center servers, and AI chips.

ABF holds over 95% of the global market share, essentially being an irreplaceable monopolistic material. The segment is expected to achieve an operating profit margin of 54% in the fiscal year ending March 2026, significantly higher than the approximately 15% level of Ajinomoto's core condiment and food business.

AI chips drive demand to exponential growth

The requirements for packaging density and signal integrity by AI accelerators have significantly increased, leading to a substantial rise in the per-chip usage of ABF— the number of ABF layers required for AI accelerators has increased from 4 to 6 layers for regular PC chips to 8 to 16 layers, with top-tier GPUs requiring even more.

The market predicts that the supply-demand gap for ABF substrates will reach 10% in the second half of 2026, expand to 21% in 2027, and further rise to 42% in 2028. Amidst the persistent supply-demand imbalance, the 30% price increase is not a one-off event but a signal of structural scarcity in pricing.

Ajinomoto continues to expand production, betting on optoelectronic fusion packaging

In response to strong demand, Ajinomoto has already started the operation of an ABF coating factory in October last year and plans to invest more than 2.5 billion yen to expand production capacity before 2030.

For a more long-term layout, Ajinomoto aims to develop new materials for optoelectronic fusion packaging after 2030, enhancing high-speed data processing and communication capabilities while reducing energy consumption to meet the requirements of the next generation of AI chip architectures.