Ajinomoto's ABF Film Monopolizes 95% of Market, China's AI Chip Packaging Faces Supply Cutoff Pressure
Nashnova编辑部
Japan's Ajinomoto is cutting ABF film supply to Chinese customers by 30% starting August. With 95% global market share, this single packaging material could bottleneck China's AI chips at the last step before mass production.
What is ABF film, and why can a seasoning company hold up the world's AI chips?
ABF film — a thin insulating layer sandwiched between the chip die and the circuit board, letting signals pass through layer by layer — is essential for packaging high-end CPUs, GPUs, and AI accelerators.
Ajinomoto alone holds roughly 95% of the global market. This means → the entire advanced-packaging supply chain effectively depends on a single supplier.
AI chips need far more ABF than traditional PC processors: a conventional chip uses 4–6 layers of ABF substrate, while a high-end AI chip requires 8–16 layers — 5 to 10 times the material per die.
How deep is the cut, and how wide is China's gap?
Ajinomoto reportedly notified Chinese customers in early August that it will reduce supply by 30%.
China's projected shortfall widens each year: 10% in H2 2026, 21% in 2027, 42% in 2028.
In plain terms = without an alternative source, nearly half of China's high-end packaging ABF demand will go unmet within three years.
The companies directly exposed are substrate and PCB makers such as Shennan Circuits, Founder Technology's Fastprint, and Shengyi Technology — the midstream of China's AI chip packaging chain.
Ajinomoto is also raising prices 30% — who is pushing for that?
UK activist investor Palliser Capital has become a top-25 shareholder in Ajinomoto and is publicly calling for ABF price hikes of over 30%.
Palliser's logic: ABF material cost is less than 0.1% of a high-end GPU's selling price. This means → a 30% price increase barely moves end-chip economics but substantially lifts Ajinomoto's margins.
According to Digitimes, Ajinomoto already notified substrate makers in May that prices will rise 30% from Q3 2026.
This reflects a textbook monopoly-pricing setup: the supplier can cut volume and raise prices simultaneously, and downstream buyers have almost no bargaining power.
How far along is China's domestic alternative?
China's domestic substitution rate for ABF-type films remains below 5%.
In April 2026, Lotus Health (a listed company best known for its MSG business) acquired a 51% stake in Shenzhen Xinlun Technology for roughly RMB 103 million. Xinlun is one of China's few suppliers close to commercial-scale production of ABF-type materials.
Xinlun's annual revenue is about RMB 6.5 million, up 67% year-on-year. It holds relevant patents, has certifications from leading customers, and is co-developing NBF film with Zhejiang University.
In plain terms = RMB 100 million buys a ticket to enter the market, not a ready-made production line. Semiconductor packaging materials require lengthy customer qualification, rigorous reliability testing, and deep coordination with substrate makers and chip companies. Ajinomoto's position rests on decades of accumulated R&D, process know-how, and customer relationships.
What does this mean for China's semiconductor self-sufficiency drive?
For years, China's chip self-sufficiency effort has focused on lithography equipment, advanced process nodes, and manufacturing tools. The ABF film case shows that "invisible" material dependencies deep in the supply chain were long overlooked.
This reflects a pattern: the real bottlenecks often sit not at the most visible links, but in layers that were never scrutinized until capacity-expansion pressure arrived.
This means → even as China makes progress in chip design and manufacturing equipment, a single-source dependency in packaging materials could still impose a hard constraint on AI chip mass production.
Content is for reference only, not financial advice.