Ajinomoto, the Japanese seasoning company that also makes almost all the world's chip packaging film, has reportedly slashed supply to Chinese customers by 30%.
Chinese outlet JW Insights, citing unnamed supply chain sources, reports the cut hits ABF, the insulating build-up film used in nearly every high-end processor package. Ajinomoto controls roughly 95% of the global ABF market; China's self-sufficiency rate sits below 5%, leaving substrate makers like Shennan Circuits, Xingsen Technology, and Shenghong Electronics exposed. JW Insights says Ajinomoto is prioritizing Japanese and other core overseas customers who supply the FC-BGA substrates under Nvidia, AMD, and Intel accelerators. The 30% cut is unconfirmed, but a separate 30% price hike Ajinomoto notified substrate makers of in May is not - it followed activist investor Palliser Capital publicly demanding a price increase of that size.
Whatever the exact cut turns out to be, the squeeze is real. Ajinomoto has already committed 25 billion yen since 2023 to grow ABF capacity 50% by 2030, with a third plant in Gifu Prefecture adding further capacity around 2032. Goldman Sachs still expects the supply-demand gap to widen from about 10% in the second half of 2026 to 42% by 2028. Three Chinese alternatives, Huazheng's CBF, Shenzhen Newface's NBF, and Hongchang's GBF, are in various stages of qualification, but none yet matches the high layer-count film that flagship AI accelerators need, and reliability testing alone can take one to three years.
The timing is the interesting part. This lands eight months after China restricted rare earth exports to Japan following a diplomatic spat over Taiwan, and Ajinomoto's own accounts chalk the cut up to AI demand allocation, not payback. Maybe. But rare earths are a market where China holds the leverage. ABF is one where, for now, it holds none.