Ajinomoto ABF film price increases by 30%, AI chip demand drives comprehensive cost increase in substrate supply chain

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Ajinomoto announces a 30% price increase for ABF laminating films, further raising the overall cost pressure in the IC substrate supply chain.

According to a Digitimes report on the 13th, Ajinomoto has officially notified IC substrate manufacturers that the new pricing for its core ABF laminating films will take effect in Q3 2026. Taiwanese substrate packaging manufacturers have confirmed receipt of the official notification. Although the new price is still under negotiation with suppliers, the increase is expected to slightly push up production costs in the short term and gradually be passed downstream through product pricing.

This price hike comes against the backdrop of sustained strong demand for AI chips. The industry expects quarterly prices of ABF and BT substrates to continue rising until the end of the year, with the upward adjustment more pronounced in the second half. For IC substrate manufacturers such as Ibiden, Samsung Electro-Mechanics, AT&S, and Taiwan's Unimicron, Kinsus, and Nanya PCB, the tight supply-demand situation is expected to support continued improvement in order visibility.

Upstream cost pressures erupting at multiple points

Ajinomoto's price hike is not an isolated incident, but the latest link in the comprehensive cost escalation across the IC substrate supply chain.

Previously, Japan's Resonac and Mitsubishi Gas Chemical (MGC) raised prices of copper-clad laminate (CCL) related materials by 30% as of April 1. Industry insiders point out that the biggest current cost pressure for IC substrates still comes from continued price increases of upstream CCL materials, and Ajinomoto’s price adjustment further intensifies supply chain cost burdens.

IC substrate manufacturers say the last ABF film price increase occurred about a year ago, at the beginning of 2025. Given the current strong demand from customers, this 30% hike is still “within a reasonable range.”

It is worth noting that supply chain tension is not limited to ABF films themselves. Upstream materials such as glass fiber cloth, copper foil, and drill bits also face shortages. With multiple bottlenecks overlapping, the ABF supply-demand gap is expected to further widen from 2027 to 2028.

Ajinomoto's Pricing Power and Capacity Layout

Ajinomoto holds over 95% of the global ABF market share, giving it significant pricing power across the entire supply chain.

Unlike T-glass glass fiber cloth supplier Nittobo, which conservatively expanded its capacity and caused tight supply, Ajinomoto started capacity expansion over three years ago, preemptively responding to changes in the supply-demand landscape for ABF substrates. Therefore, its monopoly position has not turned into a major shipping bottleneck for the supply chain.

In long-term capacity planning, Ajinomoto recently announced it will invest 1.2 billion yen (about $7.6 million USD) to acquire land in Gifu Prefecture, Japan, for a third ABF plant to meet film demand after 2030. The plant is scheduled to break ground in 2028, aiming for completion and mass production in 2032. Ajinomoto states the Gifu plant will be much larger than its existing factories in Kanagawa and Gunma.

The company also anticipates that as AI chip packaging layers rise from 3+3 to 11+11, and further to 13+13 after 2030, ABF demand will continue to grow.

AI Demand Drives Substrates into a New Shortage Cycle

Industry sources say the upgrade cycles of AI CPUs, GPUs, and ASICs are pushing up both substrate area and layer count demand, with ABF substrates entering a renewed shortage phase starting in the first half of 2026.

Among Taiwanese IC substrate manufacturers, Unimicron and Kinsus are seen as the most aggressive in expanding high-end ABF capacity. Both companies have announced increases in their 2026 capital expenditures to meet strong demand from major AI chip customers such as Nvidia and Google.

From a macro perspective, the industry widely expects a “super expansion cycle” in the next two to three years. Order visibility for IC substrate companies is expected to stabilize and continue improving, providing solid performance support for related manufacturers.

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