Ajinomoto may raise ABF film prices as AI server demand tightens supply

The AI hardware boom is now putting pressure on another important part of the semiconductor supply chain: ABF substrates.

ABF stands for Ajinomoto Build up Film. It is an insulating material used in advanced chip packaging, especially for high performance processors, AI GPUs, and ASICs. It helps connect the chip package to the PCB while supporting high I/O density and signal integrity.

That makes it critical for modern AI servers.

Demand is rising so quickly that ABF supply is expected to remain tight until the end of 2027. Substrate makers are already operating at full capacity, and prices are starting to move higher.

Ajinomoto, best known by many people as the company behind MSG, is also one of the key suppliers of ABF film. The company is reportedly considering a price increase of at least 30 percent for ABF film as demand continues to outpace supply.

That does not mean finished ABF substrates will become 30 percent more expensive directly. Because ABF film is only part of the total substrate cost, a 30 percent increase in film pricing could translate to roughly a 3 to 6 percent increase in overall substrate prices.

Spot prices are already rising more sharply, reportedly by over 30 percent in some cases. Broader ABF substrate prices are expected to increase by around 5 to 10 percent in the second half of 2026.

Here is the main picture:

The biggest beneficiaries are substrate manufacturers such as Unimicron, Kinsus, and Nan Ya PCB. These companies are seeing stronger revenues and higher capacity utilization as AI customers compete for packaging supply.

Gross margins for substrate makers are also expected to improve. The report suggests margins could reach 22 to 30 percent in 2026 and 30 to 35 percent in 2027 if demand remains strong.

The pressure is not likely to stop soon. Next generation AI servers, co packaged optics, and platforms such as NVIDIA’s Vera Rubin will need even more advanced packaging materials. That means ABF demand may keep rising even as suppliers expand capacity.

This is another example of how AI is affecting more than just GPUs and HBM. The supply chain also needs substrates, packaging, interconnects, optics, power delivery, cooling, and data center infrastructure. If any one of those parts becomes constrained, prices can rise across the entire stack.

For consumers, the impact may be indirect but still real. Higher substrate and packaging costs can feed into the price of AI servers, GPUs, CPUs, networking gear, and eventually broader PC hardware. The AI supercycle is stretching the semiconductor supply chain in many places at once, and ABF is now one more bottleneck to watch.