Ajinomoto (2802) Investor update summary

Growth strategy and market environment

• Focus on ICT sector growth, driven by rising data volumes, AI, and IoT, with electronic materials business (centered on ABF/ABF™) as a core profit driver, projected to account for about 30% of total business profit by FY2025.

• Logic IC market is forecast to grow by 37% in 2026 and 27% in 2027, driven by AI-related demand.

• ABF/ABF™ maintains over 95% market share, leveraging high-speed development and early-stage customer collaboration to adapt to technological advances and evolving semiconductor needs.

• Demand for ABF/ABF™ is expanding due to larger, multilayered substrates in AI and HPC applications, with increasing sophistication in performance requirements and technical complexity.

• Product mix is shifting toward higher value-added ABF/ABF™, improving profit margins from 30% in FY2018 to over 50% in FY2025.

Production capacity and supply chain

• Asset-light model focuses on varnish production, with outsourcing for film application and logistics, enabling flexible, scalable supply.

• Gunma and Kawasaki plants operate complementary roles, with Gunma handling mass production and Kawasaki focusing on R&D and ramp-up; new Gifu plant planned for post-2030 to further expand capacity.

• Gunma plant, operational since 2025, features automation, IoT, and labor-saving technologies, supporting high quality and efficiency.

• Investment of ¥25 billion planned between 2023 and 2030 to expand production capacity, including new sites for future demand.

• Global network supports customer growth with sites in Japan, China, Taiwan, and the US.

Technology and product development

• ABF/ABF™ is custom-developed for each customer, integrated into their product design, and priced individually based on performance and application.

• Advanced packaging trends (2.5D/3D mounting, chiplets) drive higher ABF/ABF™ usage per substrate and more complex requirements, including finer wiring and improved electrical properties.

• Ongoing development of peripheral materials and next-generation packaging technologies, including adhesives, RCC, molding, magnetic materials, and co-packaged optics.

• Magnetic materials are already contributing to business, while adhesives, RCC, and molding materials are in development with customers.

• Focus on evolving ABF/ABF™ for future technologies such as optical waveguides and heterogeneous integration.