Ajinomoto has announced a price increase for its ABF build-up film, with the hike reaching up to 30%, further elevating overall cost pressures within the IC substrate supply chain.
According to reports, Ajinomoto has formally notified IC substrate manufacturers that the new pricing for its core ABF film will take effect in Q3 2026. Taiwanese packaging substrate suppliers have confirmed receiving the official notification. While the new prices are still under negotiation with suppliers, this increase is expected to moderately raise production costs in the short term and gradually be passed downstream through product pricing.
This price adjustment occurs against a backdrop of persistently strong demand for AI chips. The industry anticipates quarterly price hikes for ABF and BT substrates to continue through year-end, with more significant adjustments expected in the second half. For IC substrate manufacturers such as Ibiden, Samsung Electro-Mechanics, AT&S, and Taiwan's Unimicron, Kinsus, and Nan Ya PCB, the tight supply-demand situation is expected to support a continued improvement in order visibility.
**Multiple Upstream Cost Pressures Emerge** Ajinomoto's price hike is not an isolated event but rather the latest development in a broad-based cost increase across the IC substrate supply chain.
Prior to this, Japan's Resonac and Mitsubishi Gas Chemical (MGC) raised prices for copper-clad laminate (CCL) related materials by 30% effective April 1. Industry sources point out that the most significant current cost pressure for IC substrates still stems from continuous price increases in upstream CCL materials. Ajinomoto's follow-up adjustment further intensifies the cost burden on the supply chain.
IC substrate manufacturers indicate that the last ABF film price increase occurred approximately a year ago, in early 2025. Given the current strong customer demand, this 30% hike remains within a "reasonable range."
Notably, supply chain tightness is not limited to ABF film itself. Upstream materials such as glass fiber cloth, copper foil, and drill bits are also facing shortages. With multiple bottlenecks converging, the ABF supply-demand gap is projected to widen further from 2027 to 2028.
**Ajinomoto's Pricing Power and Capacity Strategy** Ajinomoto commands over 95% of the global ABF market, granting it significant pricing influence over the entire supply chain.
Unlike glass fiber cloth supplier Nittobo, whose conservative capacity expansion has contributed to tight T-glass supply, Ajinomoto initiated capacity expansion over three years ago, proactively preparing for shifts in the ABF substrate supply-demand landscape. Consequently, its dominant market position has not translated into a major shipment bottleneck for the supply chain.
Regarding long-term capacity planning, Ajinomoto recently announced an investment of 12 billion yen (approximately $760 million) to acquire land in Gifu Prefecture, Japan, for constructing a third ABF plant to meet post-2030 film demand. Construction is slated to begin in 2028, with completion and mass production targeted for 2032. Ajinomoto stated that the scale of the Gifu plant will far exceed its existing production bases in Kanagawa and Gunma.
The company also forecasts that ABF demand will continue to grow as AI chip packaging layers increase from 3+3 to 11+11 and further progress to 13+13 layers post-2030.
**AI Demand Drives Substrates into New Shortage Cycle** Industry sources report that the upgrade cycles for AI CPUs, GPUs, and ASICs are driving increases in both substrate area and layer count requirements. ABF substrates have re-entered a shortage state since the first half of 2026.
Among Taiwanese IC substrate manufacturers, Unimicron and Kinsus are viewed as the most aggressive in expanding high-end ABF capacity. Both companies have announced increased capital expenditure for 2026 to address strong demand from major AI chip clients like NVIDIA and Google.
From a broader perspective, the industry widely expects to enter a "super expansion cycle" over the next two to three years. Order visibility for the IC substrate sector is anticipated to stabilize and improve continuously, providing relatively solid support for the performance of related manufacturers.
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