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MSG giant Ajinomoto's chipmaking foray helps break financial records

In addition to umami seasoning, the company produces a microfilm insulation used by the semiconductor industry which was repurposed from its amino acid technology

The Japanese food giant Ajinomoto has recorded a record-breaking share price after receiving a boost from its technology used to make materials for the semiconductor industry.

The company, famous for its MSG seasoning, saw its share price reach a high of ¥4,357 ($31.46) on 29 November. This beats the company’s former record of ¥4,350 which was recorded back in March 1987, as reported by Nikkei Asia.

The company first expanded into the semiconductor industry in the 1990s, when it repurposed its amino acid technology to develop Ajinomoto Build-up Film (ABF), a microfilm insulation for electronic devices.

This was first adopted by a major semiconductor manufacturer in 1999, but its popularity has surged in recent years due to the chip crisis, especially since ABF has been in scarce supply since the pandemic began.

The company’s non-food segments are predicted to provide over 40% of its overall profit this financial year. Its net profit is on track for a 10% increase to ¥83 billion too, with the semiconductor material production area of the business helping to inflate its earnings the most.

Spurred on by this, the company revealed that it will accelerate the expansion of its ABF technology and may potentially invest more than the planned ¥17 billion ($122 million) to keep up with demand, said Taro Fujie, CEO at Ajinomoto, according to Bloomberg.

Ajinomoto forecasted that its ABF product shipments will grow 18% each year to March 2026, and the growth is predicted to stay in double digits until 2030, said Fujie. 

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Around 70% of the multinational food company’s ABF goes into data centre servers, and it’s expected that the expansion of 5G will also ramp up demand. It also provides electrical insulation for high-performance CPUs.

The company said that sales in the ABF unit grew 30%, reaching ¥37.2 billion, during the six months ending with September. Ajinomoto’s frozen food business, on the other hand, makes up around 20% of its revenues and reported a loss of ¥300 million in the same time period.

ABF can be found in most of the world’s personal computers, Ajinomoto said. The material is used by most modern chipmakers when designing the smaller components inside CPUs and GPUs.

Ajinomoto said that the need for CPU substrates grew in the 1990s for three reasons. This is because there was a rise in the integrations of CPUs in personal computers, PCs transitioned from MS-DOS to Windows operating systems, and there was an increase in terminals from around 40 to over a thousand today.

"Advances in circuit integration have made possible CPUs composed of nanometre-scale electronic circuits," the company said. "These circuits must be connected to the millimetre-scale electronic components in electronic equipment and systems. This can be accomplished by employing a CPU 'bed' composed of multiple layers of microcircuits, known as a 'build-up substrate'."

It said that the ABF helps to create the micrometre-scale circuits since its surface works well with laser processing and direct copper plating. It's now considered to be an essential material for creating circuitry which guides electrons from nanoscale CPU terminals to the millimetre-scale terminals on printed substrates.

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