Ajinomoto reportedly cuts critical chip packaging film supply to China by 30% as domestic substitutes race to qualify — ABF restriction comes following Beijing’

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Ajinomoto reportedly cuts critical chip packaging film supply to China by 30% as domestic substitutes race to qualify — ABF restriction comes following Beijing'

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Ajinomoto notified substrate makers in May of a roughly 30% price hike taking effect this quarter, two months after UK activist fund Palliser Capital disclosed a top-25 shareholding on March 31 and publicly demanded the company raise ABF prices by more than 30%. That hike is confirmed, even if the volume cut isn't. ABF material accounts for about 30% of a substrate's bill of materials, so the increase flows directly into the cost of every FC-BGA package built on it. We've been tracking ABF crunches since the shortage that constrained GPU production in 2021 and 2022 , and the current cycle looks to be extending a pattern that's already hit BT resin substrates and T-glass cloth , where single Japanese suppliers also dominate.

Huazheng New Material's CBF, developed with the Shenzhen Institute of Advanced Electronic Materials, is the most mature of China's three named alternatives. The film uses a modified epoxy resin with spherical silica filler, which routes around Ajinomoto's IP rather than copying it. According to reports coming from Chinese media, its mass-production yield sits at above 85%, with reliability testing reportedly having passed inside Huawei Ascend systems and validation underway at Xingsen and Shennan Circuits. Huazheng's first production line of 3 million square meters per year is said to be running at full utilization, and a second line doubling that is slated to come online at the end of 2026.

Lotus Holdings, best known in China as a producer of MSG, acquired 51% of Shenzhen Newface, the developer of NBF, in April for roughly ¥103 million. Newface is said to have qualified all products below nine build-up layers, with nine- to 11-layer films in development and validation underway at Taiwanese substrate makers. Ajinomoto itself is a food and seasonings company that derived ABF from its amino acid chemistry in the 1990s.

Hongchang Electronics' GBF, co-developed with Taiwan's Jinghua Technology, has been validated at a leading domestic OSAT and is in small-volume trial production, with scale-up targeted for the fourth quarter. All three films face the same challenge of downstream reliability qualification taking one to three years of thermal cycling, damp-heat aging, and electrical testing, often longer than the R&D itself, and the highest layer-count films under flagship AI accelerators remain unmatched domestically. Upstream inputs, including specialty resins and spherical silica filler, are themselves partly import-dependent.

Huawei's Ascend 910C reportedly connects two compute dies on separate silicon interposers through an organic substrate, an approach SemiAnalysis has described as trading die-to-die bandwidth for yield and cost against Nvidia's CoWoS .

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