Direct answer: Ajinomoto, the Japanese company that has sold MSG seasoning since 1909, also makes Ajinomoto Build-up Film (ABF), a thin insulating film that sits inside the package of almost every high-performance computer chip. News reports put its share of the global ABF market at more than 95% (Tom’s Hardware). The film grew out of the company’s amino-acid chemistry research, and AI servers need more of it than ordinary computers, so the AI boom has turned a seasoning maker into a chokepoint in the chip supply chain. Under Philippine competition law, holding a dominant share is not illegal in itself; only abusing that position is.
Jump to: What ABF is · From MSG to microchips · Why no one else makes it · The AI boom · Market impact · Other non-food products · Is it a monopoly? · What to do · FAQ
What is ABF (Ajinomoto Build-up Film)?
ABF is an electrical insulation material used in the substrate of a chip package, the layered base that a processor sits on. Ajinomoto describes it as a thermosetting film made from organic epoxy resins mixed with fine inorganic filler particles. In its own words, ABF is “an interlayer insulating material for semiconductor packages.”
The job it does is easy to picture. The circuits on a modern processor are measured in nanometres, but the motherboard it plugs into works in millimetres. The package substrate bridges that gap with many stacked layers of tiny copper wiring, and ABF is the insulation between those layers. Ajinomoto says its surface accepts laser drilling and direct copper plating, which is what lets substrate makers build micrometre-scale circuits on it.
Its main benefits for chipmakers are:
- Fine wiring. Laser-drillable, plateable layers make dense, many-layered circuits possible.
- Reliable insulation. It keeps thousands of signal paths from interfering with each other.
- A film, not a liquid. It is laminated on as a sheet, which suits high-volume substrate production.
- A known quantity. Ajinomoto says ABF has been the “de facto standard” interlayer insulating material for semiconductor packages for more than 25 years since its 1999 launch (Ajinomoto, 7 May 2026).
Ajinomoto lists its uses as personal computers, mobile devices, cars, home and social infrastructure, and information and communications systems, and says ABF is found in “nearly all high-performance CPUs.”
What does an MSG company have to do with microchips?
The link is chemistry. Ajinomoto began in 1908, when Dr Kikunae Ikeda identified glutamic acid as the source of umami, and in 1909 the company started selling AJI-NO-MOTO, which it calls “the world’s first umami seasoning.” Making seasoning at scale made Ajinomoto an expert in amino acids and the chemicals produced alongside them.
According to Ajinomoto, in the 1970s it began basic research on applying its amino-acid chemistry to epoxy resins. In the 1990s, as personal computers moved from MS-DOS to Windows, processors needed far more connections than older lead-frame packages could carry, and the industry moved to multilayer substrates. Ajinomoto developed ABF for that shift, and it was first adopted by a major semiconductor manufacturer in 1999.
Why does no one else make it?
Other companies are trying, but none has come close yet. Three reasons stand out.
- A 25-year head start. Ajinomoto has refined the same material with chipmakers since 1999. Every new generation of processor has been designed around its film.
- Switching is risky and slow. A package material has to be tested and approved for each chip before it can be used in mass production. If a substitute fails in a data-centre server, the cost dwarfs any saving on the film, so buyers tend to stay with a proven supplier. (This is our reading of how the industry works, not a figure from Ajinomoto.)
- Rivals are still qualifying. Tom’s Hardware reported in August 2026 that China’s self-sufficiency in this film is below 5%. It named three Chinese films in development, from Huazheng, Lotus Holdings and Hongchang, at different stages of testing and small-scale production.
How the AI boom is growing Ajinomoto’s business
AI chips are large, and they sit on large, many-layered substrates, so each AI server uses much more ABF than a laptop. Ajinomoto’s own figures show the effect:
- In the year ended 31 March 2026, group sales were ¥1,583.7 billion (up 3.5%) and business profit ¥181.1 billion (up 13.7%). The Healthcare and Others segment, which includes ABF, grew business profit 45.1% to ¥66.2 billion, which the company put down largely to “strong sales of electronic materials” (Ajinomoto results).
- Investing.com’s report on the company’s results slides says ABF sales rose 25% that year, profit margins on the business topped 50%, and servers and networking now account for about 70% of ABF use, up from 40% in the year to March 2018 (Investing.com).
- On 7 May 2026, Ajinomoto announced it would buy land in Kani City, Gifu Prefecture, for about ¥1.2 billion for a third ABF plant. Construction is set to start in 2028 and production in 2032. The company named data centres and networks for cloud services and AI as the growth drivers (Ajinomoto announcement).
Investors noticed. Bloomberg reported on 31 March 2026 that the activist fund Palliser Capital had become one of Ajinomoto’s top 25 shareholders and was pushing it to raise prices for its chip insulation products (Bloomberg).
What Ajinomoto’s dominance means for the chip market
| Development | What was reported | Source |
|---|---|---|
| Price increase | Substrate makers were told in May 2026 of a price rise of about 30%, taking effect in the third quarter of 2026. | Tom’s Hardware, 19 August 2026 |
| Weight in substrate cost | ABF makes up about 30% of the bill of materials for a package substrate. | Tom’s Hardware, 19 August 2026 |
| Reported China supply cut | A Chinese outlet reported a 30% cut in supply to mainland China. Ajinomoto has not confirmed this. | Tom’s Hardware, citing JW Insights |
| New capacity | A third plant is due to start production in 2032, so new supply from it is years away. | Ajinomoto, 7 May 2026 |
The practical effect is that one supplier’s pricing and allocation decisions ripple through to substrate makers, then chipmakers, then the companies buying AI servers. With a new plant not due until 2032, any shortfall in the meantime shows up as higher prices or longer lead times rather than new competition.
The Philippines is exposed through its electronics industry. The Semiconductor and Electronics Industries in the Philippines Foundation (SEIPI) said in August 2026 that it expects electronics exports to grow 10% this year to about US$54 billion, citing demand from AI and data centres (The Manila Times). Local plants that assemble, test and package chips depend on substrates that use ABF, so costlier or scarcer film can squeeze margins here too. For the country’s wider chip ambitions, see our explainer on Pax Silica and the New Clark City AI hub.
What other non-food products does Ajinomoto make?
ABF is the best known, but Ajinomoto’s Healthcare and Others business covers much more:
- Amino acids for medicine. Essential amino acid crystals used as raw materials for infusions.
- Cell culture media. Serum-free and animal cell culture media, including StemFit, a medium for iPS and ES stem cells used in regenerative medicine research.
- Contract drug manufacturing (CDMO). Pharmaceutical intermediates and active ingredients, including high-potency ones, plus AJIPHASE technology for making oligonucleotides and AJICAP technology for antibody-drug conjugates.
- Gene therapy manufacturing. Through Forge Biologics, a gene therapy developer and contract manufacturer it acquired in 2023.
- Other functional materials. Curing agents for epoxy resins and adhesives, and release paper.
- Cosmetic ingredients. Ajidew humectants (since 1971) and Amisoft amino-acid surfactants (since 1972).
- Sports nutrition. The amino VITAL range of supplements.
Source: Ajinomoto, Healthcare and others.
Is a 95% share a monopoly under Philippine law?
Having a dominant market share is not illegal in the Philippines. What the law prohibits is abusing it. The Philippine Competition Act (Republic Act No. 10667, PCC legal handbook text) sets out the rules:
| Question | What the law says | Provision |
|---|---|---|
| Does it cover foreign companies? | Yes, for international trade with direct, substantial and reasonably foreseeable effects in the Philippines. | RA 10667, s. 3 |
| What is a dominant position? | Economic strength that lets a firm control the relevant market independently of competitors, customers or suppliers. | RA 10667, s. 4(g) |
| When is dominance presumed? | A market share of at least 50% creates a rebuttable presumption of dominance. | RA 10667, s. 27 |
| Is dominance itself banned? | No. Gaining or keeping market share through legitimate means is allowed. | RA 10667, s. 15 |
| What counts as abuse? | Conduct that substantially lessens competition, such as unreasonable price discrimination or limiting production to the prejudice of consumers. | RA 10667, s. 15 |
| What are the penalties? | Administrative fines of up to ₱110 million for a first offense, after PCC raised the Act’s original ₱100 million cap. | RA 10667, s. 29(a); PCC MC No. 21-001 |
What remains unsettled. Whether Ajinomoto is “dominant” in a Philippine sense depends on how the relevant market is defined, which the Philippine Competition Commission (PCC) has not done for ABF. A price rise during a demand boom is not automatically abuse. Applying RA 10667 to ABF is our editorial analysis, not a finding by the PCC or a court.
What Philippine businesses can do
These are practical steps, not legal requirements, unless a law is cited.
If you make or package electronics:
- Ask your substrate suppliers where they stand. Find out how much ABF-based material you rely on, what price changes they have been notified of, and their lead times.
- Check your contracts. Look at price-adjustment, supply-allocation and force majeure clauses before costs are passed on to you. Our guide to technology contracts in the Philippines covers the key terms.
- Plan for long lead times. New ABF capacity from Ajinomoto’s third plant is not due until 2032.
If you buy servers or AI capacity:
- Budget for higher hardware prices and lock in quotes where you can.
- Read the price terms in cloud and hosting agreements, since higher hardware costs can reach you through renewals.
If you believe anti-competitive conduct is harming you in the Philippine market:
- Keep records: price notices, allocation letters, emails and contracts.
- The PCC can investigate on its own, on referral from a regulatory agency, or on a verified complaint from an interested party (RA 10667, s. 31). The PCC’s File a Complaint page sets out its current procedure; consider getting legal advice first.
- A person directly injured by a violation may also bring a separate civil action, but only after the PCC has completed its preliminary inquiry (RA 10667, s. 45).
Deadline: administrative and civil actions under the Act are barred unless commenced within five years from when the cause of action accrues (RA 10667, s. 46). Source: RA 10667 (PCC legal handbook). First action: list your ABF-dependent inputs and the price or allocation notices you have received, so you can talk to suppliers, a lawyer or the PCC from documents rather than impressions.
For how AI is reshaping business obligations more broadly, read AI is moving faster than Philippine law.
Frequently asked questions
What is ABF in semiconductors?
ABF, or Ajinomoto Build-up Film, is an insulating film used between the copper wiring layers of a chip package substrate. It lets substrate makers build the dense, many-layered circuits that connect a processor to the circuit board.
What share of the ABF market does Ajinomoto control?
News reports put Ajinomoto’s share of the global ABF market at more than 95%. Ajinomoto itself describes ABF as the de facto standard insulating material for semiconductor packages.
Why is ABF important for AI?
AI processors sit on large, many-layered substrates that use more ABF than ordinary chips. Ajinomoto says data centres and networks for cloud services and AI are the main drivers of demand.
Does Ajinomoto still make MSG?
Yes. Seasonings and food remain Ajinomoto’s core business. ABF sits in its Healthcare and Others segment alongside pharmaceutical amino acids, cell culture media and contract drug manufacturing.
Is it illegal for one company to control 95% of a market in the Philippines?
No. Under RA 10667, section 15, holding a dominant position is not prohibited. The law only penalises abuse of that position, such as unreasonable price discrimination or limiting production to the prejudice of consumers.
Sources
- Ajinomoto Group, Ajinomoto Build-up Film (ABF) — ajinomoto.com
- Ajinomoto Co., Inc. and Ajinomoto Fine-Techno Co., Inc. Acquire New Plant Site (7 May 2026) — ajinomoto.co.jp
- Ajinomoto, Consolidated Financial Results for the Fiscal Year Ended March 31, 2026 (7 May 2026) — ajinomoto.com
- Ajinomoto Group, Healthcare and others — ajinomoto.com
- Ajinomoto Group, History — ajinomoto.com
- Tom’s Hardware, Ajinomoto reportedly cuts critical chip packaging film supply to China by 30% (19 August 2026) — tomshardware.com
- Investing.com, Ajinomoto FY2026 slides: record profit offset by Mideast risks (7 May 2026) — investing.com
- Bloomberg, Activist Palliser Targets MSG Maker Ajinomoto in AI Hunt (31 March 2026) — bloomberg.com
- The Manila Times, PH electronics exports to grow 10%, says Seipi (10 August 2026) — manilatimes.net
- Republic Act No. 10667, Philippine Competition Act, ss. 3, 4(g), 15, 27, 29(a), 31, 45, 46 — PCC legal handbook (RA 10667 and IRR)
- Philippine Competition Commission, Memorandum Circular No. 21-001, Adjustment of Fines (19 January 2021) — phcc.gov.ph
Related: Pax Silica explained · OpenAI launches dots AI agents · What is agentic shopping?
Featured image: Laura Ockel on Unsplash.
Sources rechecked as of: 2 October 2026. This article is general legal information, not legal advice. Cybercode.ph is an independent resource and is not a government agency or law firm.