This US startup makes a crucial chip material and is taking on a Japanese giant

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This US startup makes a crucial chip material and is taking on a Japanese giant

By James O’Donnell | MIT Technology Review | April 11, 2024

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It can be dizzying to try to understand all the complex components of a single computer chip: layers of microscopic components linked to one another through highways of copper wires, some barely wider than a few strands of DNA. Nestled between those wires is an insulating material called a dielectric, ensuring that the wires don’t touch and short out. Zooming in further, there’s one particular dielectric placed between the chip and the structure beneath it; this material, called dielectric film, is produced in sheets as thin as white blood cells. 

For 30 years, a single Japanese company called Ajinomoto has made billions producing this particular film. Competitors have struggled to outdo them, and today Ajinomoto has more than 90% of the market in the product, which is used in everything from laptops to data centers. But now, a startup based in Berkeley, California, is embarking on a herculean effort to dethrone Ajinomoto and bring this small slice of the chipmaking supply chain back to the US.  Thintronics is promising a product purpose-built for the computing demands of the AI era—a suite of new materials that the company claims have higher insulating properties and, if adopted, could mean data centers with faster computing speeds and lower energy costs. 

If you recognize the name Ajinomoto, you’re probably surprised to hear it plays a critical role in the chip sector: the company is better known as the world’s leading supplier of MSG seasoning powder. In the 1990s, Ajinomoto discovered that a by-product of MSG made a great insulator, and it has enjoyed a near monopoly in the niche material ever since. 

Thintronics is at the forefront of a coming wave of new US-based companies, spurred by the $280 billion CHIPS and Science Act, that is seeking to carve out a portion of the semiconductor sector, which has become dominated by just a handful of international players. 

But building a domestic supply chain for chips—a product that currently depends on dozens of companies around the globe—will mean reversing decades of specialization by different countries. And industry experts say it will be difficult to challenge today’s dominant insulator suppliers, who have often had to adapt to fend off new competition.  One big challenge is that the dominant manufacturers have decades-long relationships with chip designers like Nvidia or Advanced Micro Devices, and with manufacturers like TSMC. Asking these players to swap out materials is a big deal.

Another obstacle facing Thintronics is technical: insulating materials, like other chip components, are held to manufacturing standards so precise they are difficult to comprehend.  Every new iteration is a massive R&D effort in which incumbent companies have the upper hand given their years of experience.

Despite all these challenges, one thing may be working in Thintronics’ favor: US-based tech giants like Microsoft and Meta are making headway in designing their own chips for the first time. The plan is to use these chips for in-house AI training as well as for the cloud computing capacity that they rent out to customers, both of which would reduce the industry’s reliance on Nvidia.

3 key takeaways from the article

1. For 30 years, a single Japanese company called Ajinomoto has made billions producing dielectric (referred as dielectric film) placed between the chip and the structure beneath it. Competitors have struggled to outdo them, and today Ajinomoto has more than 90% of the market in the product, which is used in everything from laptops to data centers. 
2. But now, a startup based in Berkeley, California, is embarking on a herculean effort to dethrone Ajinomoto and bring this small slice of the chipmaking supply chain back to the US.
3. The company is at the forefront of a coming wave of new US-based companies, spurred by the $280 billion CHIPS and Science Act, that is seeking to carve out a portion of the semiconductor sector, which has become dominated by just a handful of international players. But to succeed, Thintronics and its peers will have to overcome a web of challenges—solving technical problems, disrupting long-standing industry relationships, and persuading global semiconductor titans to accommodate new suppliers.

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Topics:  Semiconductor, Technology, Japan, USA, Ajinomoto