Ajinomoto is a Japanese brand known worldwide, including Malaysia, for its food seasoning monosodium glutamate or better known as MSG. But did you know that the company also holds a global monopoly on another material used by almost all semiconductor chip manufacturers in the world?
The material is Ajinomoto Build-up Film, or ABF, which is an insulating film used by all technology companies that develop their own semiconductor chip components. This ABF material has been patented by Ajinomoto, and it is estimated that 95 percent of the world's semiconductor companies use it.
A recent report from the Shenzhen Electronics Chamber of Commerce said that Ajinomoto has recently cut off the supply of ABF film to the Chinese market, and this is seen to cause a significant shortage of components for semiconductor component manufacturers.
This issue will prevent semiconductor chip companies in China from completing their manufacturing processes, and in the medium to long term, will prevent them from selling their semiconductor component offerings to their customers.
Ajinomoto currently produces 2 million square feet of ABF film per month and this is the company's full capacity for the foreseeable future. Ajinomoto is also reported to be increasing its capacity by 50 percent with a $5 billion investment to build a new production plant, but this is not expected to become a reality until around 2030.
It is reported that Ajinomoto is cutting back on the Chinese market because they want to give priority to local semiconductor companies as well as global semiconductor companies such as AMD, Intel and NVIDIA who are their largest customers.
However, the Chinese side also seems to have started preparing earlier this year, where their own MSG manufacturer, Lotus Holdings, bought a 51 percent stake in Shenzhen Newface New Material Technology Co., Ltd to enter the ABF component production arena.
It is reported that Shenzhen Newface is currently developing its own ABF-like insulating film technology, and this acquisition is said to allow its semiconductor chip manufacturing industry to not be as dependent on ABF films as other countries and companies. However, this research process will take several years before it can replace Ajinomoto's ABF films.
