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Ajinomoto, the 112-year-old Japanese food maker most famous for its monosodium glutamate seasoning, has emerged as a surprising beneficiary of the upheaval caused by the pandemic.

While its spices and sauces have struggled as lockdowns devastate the restaurant industry, the company’s unexpected sideline as a supplier of a high-tech film for the computer chip industry has been booming — helping Ajinomoto report a record operating profit last quarter.

Ajinomoto illustrates Japan’s ability for corporate reinvention, much like Fujifilm transformed itself from a maker of photographic film into a pharmaceuticals powerhouse and Olympus turned itself from a struggling camera maker into the leading manufacturer of endoscopes.

But analysts now want to know how far and how fast Ajinomoto can move beyond its roots in the food industry.

“ABF is inside most of the desktop and laptop PCs people use,” Shigeo Nakamura, the company’s head of chemical products, told Nikkei Asia, referring to Ajinomoto buildup film. 

ABF is a thin composite used to attach a processor to a base layer called a substrate, forming part of a chip package that connects the chip to the motherboard and protects it from damage.

Ajinomoto's sales by segment for year to March 2021

ABF is laminated onto a substrate, which is then plated with copper, allowing circuits to be fabricated. The substrates are used widely in the high-powered computing chips found in satellites, 5G base stations and self-driving cars. 

As the coronavirus unleashed huge demand to upgrade information technology infrastructure — and triggered a global chip shortage — Ajinomoto’s sales could be even higher if its customers were able to scale up more quickly to meet demand.

The stock market has rewarded Ajinomoto with its highest share price in five years, and the business segment that includes electronics and health care accounted for 23 per cent of the company’s overall operating profit in the year ending March 2021.

“Every company needs to review its business portfolio regularly,” said Makoto Morita, equity analyst at Daiwa Securities. “That’s especially the case for Japanese food makers, which face a shrinking population in their home market.”

Morita wants Ajinomoto to be even more aggressive in reshuffling its portfolio. Global food makers like Nestle, Danone and Unilever, he said, make more acquisitions and divestitures than their Japanese peers. “Ajinomoto could do more.”

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