Yahoo Finance Ajinomoto May Build New Factory for Crucial Film Used in Electronic Chips
(Bloomberg) -- Ajinomoto Co., better known for its seasonings, oils and food products, may add a new manufacturing base to produce more of a specialized material used for semiconductors, Chief Executive Officer Taro Fujie said.
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The Japanese company may invest more than its planned ¥25 billion ($186 million) if necessary, and will make a decision on any new factory within a few years, Fujie said in an interview. Ajinomoto Build-Up Film, which helps to connect chips to circuit boards, was developed in the 1970s using the food company’s expertise in resins and amino-acid-chemistry.
Ajinomoto is the dominant supplier and shortages of ABF contributed to the chip crunch experienced in the early days of the pandemic. Demand for semiconductors has been steady, helping to boost the company’s stock by 21% this year to record highs and outpace the broader Topix Index. Analysts are projecting, on average, a 19% jump in revenue for the fiscal year through March when the company reports results on May 11.
“We’ll do what it takes to stay ahead of the competition,” Fujie said. “Our clients trust us for the speedy supply of high-quality products.”
Ajinomoto got its start more than 100 years ago after Kikunae Ikeda discovered monosodium glutamate and named its associated taste, umami. That led to the founding of the company by Saburosuke Suzuki, which sells the ingredient along with beverages, dairy products and processed foods.
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Shipments of Ajinomoto Build-Up Film are forecast to expand 18% annually through fiscal 2025, the company said. The global ABF market is on track to reach $6.5 billion by 2028, according to researchers at Absolute Reports.
About 60% of Ajinomoto’s ABF output went into high-end data center servers for fiscal 2022 and the ratio is forecast to reach 75% to 85% by fiscal 2030, according to Ajinomoto’s mid-term business plan, released in March.
“It’s quite visible that the area where ABF will be used on a chip will increase in the future,” Fujie said. “We’ll make investments that will enable us to respond to that demand.”
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