Japan's food company Ajinomoto has secured an effectively dominant position in the market for key semiconductor materials, while investor pressure is growing over its pricing policy. Critics say the company is an underpriced monopoly as demand expands for artificial intelligence (AI) semiconductors.

On April 14, local time, online media outlet Gigazine reported that British investment fund Palliser Capital 공개하고 its plan to boost Ajinomoto's value and argued the company is not sufficiently lifting profitability in its semiconductor materials business. The Ajinomoto Build-up Film (ABF) business for semiconductors has emerged as the key issue.

ABF is an essential material used as an interlayer insulating material in semiconductor packages. Palliser Capital assessed that Ajinomoto holds an effectively near-100 percent global share of this market. It argued that, despite surging demand for AI semiconductors, the key supplier is not fully exercising pricing power.

The fund said, "Ajinomoto is in a position to create more value from customers, yet is hesitant to significantly raise prices." It defined the company as the "least monetized AI infrastructure monopoly" and argued that the current pricing policy is leading to lost opportunities.

It specifically proposed raising ABF prices by at least 30 percent. Palliser Capital said ABF accounts for less than 0.1 percent of the final product price, so any increase in customer burden would be limited even if prices rise. It argued that, while ABF is a key material, its share of finished-product costs is low, leaving ample room for price increases.

Some analysis says whether prices actually rise will depend on supply and demand conditions. Japanese materials makers typically tend to be reluctant to raise prices unless factors such as material shortages or sharp increases in production costs occur. Demand for advanced AI chips could keep rising, raising the possibility that ABF supply could become tight.

The market expects the turning point will be when demand overtakes supply. Jukan Choi (최주칸), an analyst at Citini Research, said that if semiconductor companies' pace of ABF consumption exceeds Ajinomoto's output, pressure to raise prices will ultimately grow.

This shareholder activism pressure appears to be spreading to other Japanese materials companies. Palliser Capital presented a similar value-boosting strategy to TOTO, known as a sanitary ware maker. TOTO produces special ceramic materials used in advanced semiconductor processes and electrostatic chucks for cryogenic dielectric etching equipment.

The fund forecast that demand for electrostatic chucks will also rise quickly as an increase in the number of chip stacking layers combines with growing demand for AI semiconductors. It proposed actively promoting the growth potential of the related business, expanding investment and using financial strategy to lift earnings per share.

The market says the case shows that in the spread of AI semiconductors, investors are reviewing not only finished chip makers but also the pricing power and profit structures of materials and components companies. Ajinomoto is drawing attention as it is being reassessed beyond its image as a food company, as a key company in the AI semiconductor supply chain.