[News] Ajinomoto Boosts Chip Materials Business With ¥1.2B Land Buy for 2032 Plant; ABF Margins Top 50% on AI Boom

Japan’s food seasoning maker Ajinomoto, which has also become a key supplier of chip packaging materials, is accelerating the expansion of its semiconductor-related business. According to a company press release, Ajinomoto, through its consolidated subsidiary Ajinomoto Fine-Techno Co. (AFT), will acquire land for a new factory at the Kani-Mitake Interchange Industrial Park in Gifu Prefecture’s Kani City. Construction is scheduled to begin in 2028, with operations planned for 2032. The land acquisition cost is approximately JPY 1.2 billion.

At the site, the company plans to build a production facility for Ajinomoto Build-up Film (ABF), an interlayer insulating material used in semiconductor packaging. The new plant will become AFT’s third production base, following its headquarters facility in Kawasaki, Kanagawa Prefecture, and its Gunma plant in Showa Village, Gunma Prefecture.

The company has long operated in semiconductor packaging materials. As its press release states, since its launch in 1999, ABF has been used in semiconductor packages for CPUs and GPUs used in PCs and gaming consoles, becoming a widely adopted interlayer insulating material in the industry. TV Asahi adds that the company is said to hold more than 95% of the global ABF market share.

Its press release indicates that demand for ABF is expected to continue growing, driven by cloud services, AI data centers, and networking applications. The new facility is intended to expand ABF production capacity in preparation for semiconductor market growth beyond 2030.

ABF Business Delivers Over 50% Margins Amid AI Demand

The semiconductor business has become increasingly important to the company. According to NNA Asia, the company announced on the 7th that operating profit for the fiscal year ending March 2026 reached a record ¥181.1 billion, up 13% from the previous year. Of that total, the Functional Materials (electronic materials) segment, centered on ABF, generated ¥54.6 billion in operating profit, up 35% year over year and accounting for 30% of total operating profit.

Sales also reached a record high, rising 3% year over year to ¥1.5837 trillion. Of that total, the electronic materials business generated ¥100.7 billion in sales, up 31% from the previous year and accounting for 6% of the company’s overall revenue. The operating profit margin of the electronic materials business also climbed to more than 50%.

NNA Asia notes that semiconductor package substrates are becoming increasingly larger, particularly for AI servers, driving a sharp increase in ABF usage as substrate area and layer counts expand. Meanwhile, Company President Shigeo Nakamura said the company is conducting joint development with end users, as larger AI-oriented substrates require higher-performance ABF materials.

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(Photo credit: Ajinomoto)