Ajinomoto's ABF film could influence AI chip supply, with potential implications for Nvidia

In the surge of artificial intelligence, Ajinomoto—best known in global markets for monosodium glutamate—has come onto investors’ radar after an active fund disclosed a new stake in the Japanese company, citing the strategic importance of a key material used in AI-related semiconductor manufacturing.

Investor focus shifts to Ajinomoto’s semiconductor materials

Palliser Capital recently bought a stake in Ajinomoto, arguing that the company controls a material essential to AI infrastructure and could generate high profits. Ajinomoto’s food business is built on the discovery of umami and the commercialization of monosodium glutamate, but the company also operates a functional materials arm.

That arm produces Ajinomoto Build-up Film (ABF), an insulating dielectric film developed in the late 1990s. ABF is used to create interposer layers in semiconductor chips, helping connect and transmit thousands of signals between chips and devices.

According to the article, without ABF many advanced chips could not be manufactured, giving Ajinomoto influence over parts of the supply chain for major technology companies including Apple and Nvidia.

Palliser pushes for higher ABF pricing

Palliser Capital, which the article says is now among Ajinomoto’s 25 largest shareholders, is urging the company to rethink ABF pricing. The fund described ABF as “one of the least exploited AI infrastructure monopolies” and proposed increasing ABF prices by more than 30%.

The fund’s argument is that the price increase would have limited impact on customers because ABF would represent under 0.1% of a GPU’s price.

Ajinomoto said it values investor input and would use feedback to drive sustainable growth.

Market performance and recent results

On the stock market, Ajinomoto’s shares have risen more than 40% since it announced results that beat expectations in February.

Supply constraints and pricing risks

The article notes that Ajinomoto’s position in ABF gives it leverage in the global semiconductor supply chain. Only a few firms can convert ABF into ultra-dense substrates used to produce chips for technology companies such as Apple and Nvidia.

It also points to cost pressures elsewhere in the AI hardware materials supply chain. Nittobo, a Japanese textile company supplying materials for AI hardware, is raising the price of its T-glass fabrics due to tight supply and higher production costs.

Ajinomoto could face risks if it raises ABF prices while supply remains stable, potentially eroding customer trust. The article states that ABF prices have been stable so far, but demand for AI chips is rising and Ajinomoto has begun expanding capacity to meet the market.

Capacity expansion through 2028

According to the article, Ajinomoto has started expanding capacity and plans to increase output to meet demand. Forecasts cited in the article suggest the supply–demand gap in this area will continue to widen through 2028, while many producers say AI-related lines are running at or near full capacity.

If demand outstrips supply, the article says price pressures may be difficult to avoid.

Balancing supplier image and growth opportunities

Analysts cited in the article say Ajinomoto’s challenge is balancing the maintenance of a stable supplier image with capturing growth opportunities from the AI market. The outcome, they suggest, will determine whether the company can move beyond being viewed primarily as a “spice giant” toward a more central role in global technology infrastructure.