But in the last few years, both the US and Chinese governments have changed that way of thinking. And new policies subsidizing domestic chip manufacturing are creating a favorable environment for companies to challenge monopolies like Ajinomoto’s.
In the US, this trend is driven by the fear of supply chain disruptions and a will to rebuild domestic semiconductor manufacturing capabilities. The CHIPS Act was announced to inject investment into chip companies that bring their plants back to the US, but smaller companies like Thintronics could also benefit, both directly through funding and indirectly through the establishment of a US-based supply chain.
Meanwhile, China is being cornered by a US-led blockade to deny it access to the most advanced chip technologies. While materials like ABF are not restricted in any way today, the fact that one foreign company controls almost the entire supply of an indispensable material raises the stakes enough to make the government worry. It needs to find a domestic alternative in case ABF becomes subject to sanctions too.
But it takes a lot more than government policies to change the status quo. Even if these companies are able to find alternative materials that perform better than ABF, there’s still an uphill battle to convince the industry to adopt it en masse.
“You can look at any dielectric film supplier (many from Japan and some from the US), and they have all at one time or another tried to break into ABF market dominance and had limited success,” Venky Sundaram, a semiconductor researcher and entrepreneur, told James.
It’s not as simple as just swapping out ABF and swapping in a new insulator material. Chipmaking is a deeply intricate process, with components closely depending on each other. Changing one material could require a lot more knock-on changes to other components and the entire process. “Convincing someone to do that depends on what relationships you have with the industry. These big manufacturing players are a little bit less likely to take on a small materials company, because any time they’re taking on new material, they’re slowing down their production,” James said.
As a result, Ajinomoto’s market monopoly will probably remain while other companies keep trying to develop a new material that significantly improves on ABF.
That result, however, will have different implications for the US and China.
