Good morning, everyone. Thank you very much for taking the precious time to attend Ajinomoto's business briefing session, despite your busy schedule. My name is Kaji from the IR group. I'll be serving as your MC. Let me first introduce the participants from Ajinomoto. We have the Representative Executive Officer and President, Mr. Fujie.
This is Fujie. Thank you very much indeed from early morning.
Representative Executive Officer and Executive Vice President, Shiragami.
This is Shiragami.
Executive Officer and Vice President, General Manager of AminoScience Division, Mr. Maeda.
This is Maeda.
Executive Officer, Vice President in charge of Finance and Investor Relations, Mizutani.
This is Mizutani here. Nice to meet you.
Corporate Executive President and Representative Director of Ajinomoto Fine-Techno Company.
My name is Mr. Mago.
This is Mago here.
Specialty Chemicals Department, Oshimura.
This is Oshimura here.
Nice to meet you.
Executive Officer, General Manager of Amino Acid Department, Michael Lish.
Hi. This is Mike. Thank you.
The Corporate Fellow of R&D Department, Mr. Konishi.
This is Konishi here.
Kawasaki Plant Quality Assurance and Quality Control Department, Research Institute for Bioassays Products and Fine Chemicals, Aritomi.
This is Aritomi here.
The Head of Biopharma Services Department, Mr. Otake. The Biopharma Services Department, Mr. Okuzumi.
This is Okuzumi. We have 12 members from the company here. Mr. Fujie, the floor is yours.
Good morning, ladies and gentlemen. This is Fujie speaking. Thank you very much for taking time out of your busy schedule to attend our business briefing. Today, we are hosting this business briefing where we will explain business activities that are currently underway, both at present and for the future. At today's business briefing, there are mainly four items that we'd like to convey. First, after announcing the 2030 roadmap under the midterm ASV initiative, after announcing this, the entire team is working together to achieve ASV indicators. Number two, by utilizing our proprietary AminoScience, we've identified four BMX areas where we'd like to drive our growth through BMX. We'd like to further accelerate the growth of existing businesses. By integrating BMX with the existing business, we'd like to create new values in order to attain an exponential growth. Number three, in healthcare.
In core businesses, we'd like to further realize our growth. In addition, we'd like to concentrate our management resources on core strategic businesses so that we can capture cutting-edge innovation and modality to keep evolving ourselves. In ICT, we'd like to further evolve ourselves into growing areas by utilizing our value chain network. Furthermore, we'll accelerate high-speed development and tap into new generation, new areas, and new business material development. First of all, in terms of evolving our 2030 Vision, which is already announced, our purpose has been renewed. The new Vision reads, "By AminoScience, we will contribute to the well-being of people and society, as well as the Earth." The next page describes the management transformation under or towards the midterm ASV initiative.
While pursuing business forecast as our commitment, we will also keep challenging, take on new challenges such as ASV indicators for 2030, then back cast from there to take flexible measures in order to improve our execution. That is the management transformation that is underway. Number three, on the next page. This is our basic policy pertaining to growth strategy. As you can see on this slide, AminoScience as well as growth potential of the market and social values, high social value areas, those will be the focus areas for us. Amongst this, we identify four BMX areas, namely Healthcare, Food & Wellness, as well as ICT and Green. That is the center of our activities. Next slide, please. Regarding 2021, food generated about 30% of revenue or profits, and the remaining was generated by AminoScience.
We'd like to grow both food and AminoScience business further so that it can top more than 10% in CAGR for AminoScience. By 2030, we'd like to reach the 50/50 breakdown between food and AminoScience. That way, Ajinomoto can become a highly unique, not just food company, but not just AminoScience company. That is our vision. Today, we'll be introducing the specifics for growth strategy from each business. If you have any questions, we'd like to keep exchanging our views so that we can further speed up and scale up our BMX areas and growth strategy. Thank you very much for all your contribution.
Fujie-san, thank you very much. Now we'd like to turn the baton to Shiragami-san.
Good morning, this is Shiragami. Today is a session for AminoScience business, ICT, and healthcare. I will first talk about the key to our growth in this domain, i.e., AminoScience, and then share with you our views concerning the sustainable growth leveraging AminoScience. As we presented in a roadmap presentation in February, AminoScience is a collective term for various materials, functions, and technologies, as well as services derived from the research and implementation processes with a rigorous focus on the function of amino acids. It also refers to Ajinomoto Group's unique scientific approach and strengths to connect these to resolving social issues and contributing to well-being. As stated in our corporate purpose, we will aim to contribute to the well-being of people, society, and Earth through AminoScience. Next page, please.
The base of AminoScience, amino acid, has four key functions. In food business, flavoring function is very important as it makes food delicious. The nutrition function is self-explanatory. It delivers nutrition in one's body. In addition to these two, there is also this physiological function that helps maintain and recover one's mental and physical health, and the reactivity function that allows conversion from amino acid into various useful substances. These four functions and their combinations are the sources of producing various useful effects for living beings. AminoScience created through amino acids are the sources of our competitive value creation. By brushing up and evolving these diverse and unique AminoScience, we have rolled out various businesses over the last century, such as food, health, and Functional Materials that could lead to solving wide-ranging social issues.
We are committed to further improving and evolving AminoScience going forward to drive innovation and thereby creating new values and solving social issues in these four domains. In healthcare, we will contribute to advancing treatment and design and disease, as well as extending health life expectancies. In Food & Wellness, we will contribute to people's well-being and self-realization through food. In the area of ICT, we will help advance semiconductors and realize a smart society. In the area of green, we will strive to create a new standard for food and for the future generation to achieve symbiosis with the Earth and reduce environmental impact. Through value creation in all four areas, we will lead such endeavors to the realization of our corporate purpose, i.e., making contribution to the well-being of human beings, society, and our planet.
From now, let me show you a one-minute video here, which is entitled Working to a Future of Well-being. The video depicts how we plan to take on new challenges for the future in four areas, leveraging AminoScience, the source of Ajinomoto's strengths.
Since the inception of the Ajinomoto Group, we've driven growth by consistently creating new value for realizing a better world. In times of rapid change across people, community, and climate, we've resolved to crystallize our reason for being and continue to pursue value that only the Ajinomoto Group can provide. The outstanding quality of our work is rooted in AminoScience. This unrivaled advantage will be instrumental in four areas of future growth. Healthcare, for realizing cutting-edge modern medicine. Food & Wellness, for experiences of joy through the ritual of dining. ICT, to ensure efficient technology for a smart society. Green, initiatives for a future with Earth in mind. We will take on the challenge of exploring the limitless potential for the future of all human beings, our society, and our planet. We will envision the future of well-being through a wide lens of innovation. AminoScience for the future.
For the future of the Ajinomoto Group.
Other than this video, we plan to create a series of video content for all our employees so they can learn the source of our strengths, AminoScience, and our growth strategy in the four areas. Through dialogue with the employees, we plan to have each employee think and take on actions to realize AminoScience and ASV, as well as a corporate purpose. For today, out of these four areas, in relation to ICT and healthcare domains, we aim to achieve a significant increase in the business profit towards 2030 from the AminoScience-related businesses in these two areas. In AminoScience business, over the last 10 years, we have addressed the transition and concentration on high value-added businesses and successfully grew our business profit at a CAGR of approximately 18%.
Going forward, we will continue to evolve our business model and address to speed up and scale up our growth.
Our ICT business continues to grow and evolve based on a certain format of business model transformation. The three key points are listed up here. Despite the case of ABF, we first need to foresee the innovations that take place in the semiconductor market, and through co-creation with ecosystem partners, we develop ABF that has a high entry barrier and realize the evolution of semiconductors. This pattern of success will be repeated in all four areas, including food and wellbeing and green. Through the business development in these areas, there is a time lag between R&D and business growth. ABF, which currently contributes to our profits, was initially developed five to 10 years ago and was adopted by customers.
To attain long-term sustainable growth through market modality and innovation, it is essential for us to make R&D investment ahead of time and to carry out appropriate inorganic investments to accelerate business development to attain first-mover advantage in the markets. To realize the growth strategies in four BMX areas, we'd like to directly access the global markets, customers, and innovations in order to early detect changing markets. To do this, we will set up the innovation strategy team charged with speedy examination and decision-making on inorganic investments, ecosystem creation, and partnering opportunities. Doing so will drive growth in four BMX areas. We patent innovation outcomes to form IP or intellectual properties to establish high entry barriers. According to each business' characteristics, we'll assess patent values to promote IP technologies, which are then reflected in R&D business and regional strategies.
By visualizing this IP value, R&D strategies as well as other portfolio strategies are formulated to promote through the promotion of IP. When we announced the 2030 roadmap in February in four BMX areas, we presented the overview linking the existing businesses and BMX to drive the growth strategy spanning multiple domains. Today, we'd like to focus on the two areas on the left-hand side. I am going to present the overarching growth strategy, which will be followed by presentations on concrete business strategies presented by a person in charge. ABF, a mainstay product in ICT, was engendered by AminoScience, of course. The product itself, MSG, and nucleotide-based seasonings are produced from sugarcane as a starting material utilizing our biotechnology or bio capability. Prior to the current method, though, they were produced from starch and soybeans as the starting materials.
The ingredients, byproducts, and intermediates were utilized for a sustainable business to buttress our production. This led to the initiation of chemical business, including resin additives. Eventually ABF was created by the further evolution of AminoScience, such as compounding technology. With the advancement of semiconductors, ABF now became a de facto standard for the semiconductor package and serves as an essential part for high-end applications, including PCs and servers, and for HPCs. The usage volume is on the rise. Going forward, for AI semiconductors, which are expected to grow further, such as generative AI and GPU, ABF is in high demand and is expected to accelerate its growth.
In the areas of photo-electric fusion, which is underway as a world cutting-edge technology for future innovation, we'd like to evolve our technologies accumulated through ABF so that new materials can be developed in order to contribute to a sustainable growth in ICT. The semiconductor industry is evolving at a great speed. There exists a semiconductor development value chain, which addresses the rapid advancement of precise and high-performance semiconductors. Amid the value chain, ABF plays a key role in ensuring semiconductor performance, and it serves as a central role in its advancement. Thus, ABF has established its unique and unparalleled position. A significant key element in ICT growth strategy is to utilize its advantageous position in order to enhance co-creating ecosystem together with semiconductor players to keep contributing to semiconductor advancement. In healthcare, let me outline the business strategy here.
On the X-axis, we anticipate healthcare modality evolution in the market to be anticipated, on the Y-axis, we show the business model that we are furthering. Through this combination or through these metrics, we advance this business based on the healthcare core, combined with AminoScience evolution. With amino acids for pharmaceutical companies at its core, we started out with medicine intermediates, including amino acid derivatives, utilizing the reactivity and physiological functions of amino acids, and are now expanding our biopharma business in the biologics area. The other business expansion is from non-serum cell culture media, utilizing the nutrition function and physiological functions of amino acids into cell culture media for biological biopharmaceuticals and regenerative medicine. As a target for next-generation business, we paved the way for cell therapy and gene therapy, both of which are expected to grow significantly.
Doing so will enable a business evolution going forward. Under the growth strategy in healthcare, in addition to the existing businesses, in the BMX areas, which have immense market size and growth potential, we'd like to significantly grow nucleotides, cell culture media, as well as medical foods. We'd like to prepare for next-generation businesses which have high market growth rates in order to accelerate and expand our growth. From here on, we'd like to invite a representative for each business to introduce specific growth strategy. In these areas, we have a deep bench of talents who have profound experience of research and production and are well-versed in AminoScience. I'd like to give the floor to those representatives. Thank you very much, Shiragami-san.
Mago-san, please begin.
Hello, this is Mago from Ajinomoto Fine-Techno. I would like to talk about our growth strategies centered on ABF in relation to the ICT domain. Please look forward to this. Next page, please. These are the four topics that I plan to cover today. First, I will give an introduction to our existing ABF and the overall Functional Materials business. I will talk about the semiconductor market, particularly the growth prospects for the semiconductor devices that use ABF. After that, I will explain our competitive advantage in the ICT space, finally share with you our medium to long-term business strategies. First of all, let me give you an explanation on our Functional Materials product lineup, including ABF and their key applications. After the market launch in 1999, we have continuously expanded our Functional Materials business, primarily through ABF.
Leveraging the compounding technology and molecule design that shapes ABF, we created a wide array of products in our lineup. They are used as key materials for personal computers, servers, automobiles, information network infrastructure, mobile devices, and other computing platforms, making great contributions to people's wellbeing all over the world. The slide here briefly explains how ABF is used. Most of the computers out there in the market adopts ABF of Ajinomoto. In a personal computer, there is a substrate called motherboard that carries many different electronic components. One of such component is a CPU, which is the most important component for a personal computer. The CPU consists of the IC chip and the package substrate carrying the chip. An ABF is used inside the package substrate.
The package substrate sits between the IC chip and the motherboard and precisely sends and receives electric signals, which enables stable operations of the personal computer. Here's a cross-section diagram of the package substrate. The ABF is used as an insulator between layers. ABF is very thin with a thickness of only 20 - 30 microns, thus it is a very high-precision insulation material. The average thickness of human hair is approximately 80 microns in the case of Japanese, so that gives an indication how ABF is thin. We launched ABF back in 1999. Over the last 20 years, ABF has been adopted as a de facto standard of package substrate insulation material by many semiconductor manufacturers. Here, I would like to talk about our new markets and the new application strategy. The slide here presents our growth matrix plotted from the market and product axes.
As for the existing products and markets on the bottom left, we will defend our PC and gaming console business, which are the main application of ABF today. In the markets for existing products on the upper left, we will aim to grow the use of ABF in high-performance computing, i.e., the servers, data centers, communication network infrastructure, and AI. I will explain in more detail in the slides after this. We believe the high-performance computing applications will become increasingly important as we cannot expect a significant growth in the volume of PCs going forward. In the bottom right, the existing market for new products. We will propose magnetic materials generated as a byproduct of applying ABF. Nowadays, the rapid increase in power consumption in servers and data centers is becoming a social issue. We believe this magnetic material offers a potential solution to this problem.
Lastly, for the upper right, the new products for new markets. We plan to take on new challenges leveraging ABF, such as ABF-RCC and semiconductor sealing materials. The production sites of ABF are shown here. The manufacturing process of ABF can be divided into two stages. One is the production process of liquid resin compositions called varnish. The other is the coating process, spreading out the liquid resin compositions into film coating. We have two sites for varnish manufacturing, Kawasaki and Gunma. The film coating is done in three locations in Gunma and Niigata. The Gunma plant specializes in ABF mass production. This plant is co-located with our varnish plant, our outsource partner's coating plant, and a warehouse for frozen storage of the finished ABF product, which allows for an efficient one-stop production.
To meet the growing demand from our customers in Taiwan in recent years, we secured a frozen storage in Kaohsiung, Taiwan, to realize timely and stable delivery, and to ensure business continuity, BCP. Going forward, to respond to the demand growth of ABF towards 2030, as we announced earlier, we have a plan to further build up the production capacity of the Gunma plant starting this year. The new varnish facility will introduce automation systems in part of its processes to ensure high efficiency by design, and also to be environmental conscious. We plan to invest some JPY 25 billion for this purpose. From here, I would like to talk about our growth projections in the market. As I explained on Page five, the future growth of semiconductor package substrate is expected to be driven by high-performance computing such as servers, data centers, communication network infrastructure, and AI.
According to our survey, the total shipment of HPC devices is expected to quadruple by 2030 compared to the level in 2023. We therefore expect the shipment of ABF will also increase in line with this trend. I mentioned in the previous slide that ABF for high-performance computing will increase significantly in the future, and this slide shows the background behind that trend. The semiconductor package substrate used for PC CPUs generally has a size of three to four centimeters square. Usually, six layers of ABF are used in the substrate, three above and three below. Meanwhile, the semiconductor package substrates for HPCs are becoming larger in size, usually has a size of more than five square centimeters, or even seven centimeters square in some cases. The number of ABF layers for such substrates totals 18 layers, nine above and nine below.
Meaning that the amount of ABF used is 10x higher compared to ordinary PCs. For these reasons, we believe the demand for ABF would be driven by high-performance computing in the years ahead.
From here on, I'd like to mention our competitive advantages in ICT. As was previously mentioned in the business briefings before, Ajinomoto conducts integrated development activities across the entire value chain under the banner of High-Speed Development System. As the slide indicates, this encompasses not only direct ABF customers but also end users, manufacturers involved in the ABF-based substrate manufacturing processes, upstream ingredient, and material manufacturers as well. Through external collaboration with a consortium from time to time, we detect customer and societal needs ahead of others. Furthermore, we will provide solutions in a timely manner, and also we utilize our own MI, Materials Informatics, to accelerate the speed of development. This slide simplifies the High-Speed Development System that integrates the value chain shown in the previous slide. The left-hand side is the upstream of the value chain, while the right-hand side is the downstream.
ABF was developed in 1997. Until then, liquid materials were used. In other words, ABF was the world's first interlayer insulating material in film form. This led to the development of the world's first manufacturing process for semiconductor package substrate using ABF. At that time, we collaborated not only with substrate manufacturers, but also with manufacturers of equipment and chemicals used in the manufacturing processes, such as plating, to establish a substrate manufacturing process that truly integrates the entire value chain. This led to the creation of the substrate development ecosystem. Likewise, we communicated with end user semiconductor manufacturers to share their next-generation needs and issues. This is leading to the creation of an even larger ecosystem to realize their needs. Meanwhile, we also deepened cooperations with upstream ABF raw material and material manufacturers to develop ABF that meets the needs of substrate and semiconductor manufacturers.
Through the collaboration of these individual ecosystems, ABF has become the de facto standard for semiconductor package substrates and constitutes a major element of our competitive advantage. Furthermore, by leveraging ABF's core technologies and co-creation ecosystems, we are developing a variety of materials and applications. Those listed on the slide are just a few examples. By combining ABF's technology with magnetic fillers or powders, we have developed magnetic materials, which contribute to energy savings in semiconductor devices for HPCs through inductor products. Also, the middle on the slide shows ABF-RCC. This is a combination of ABF and copper foil, which contribute to thinner and smaller motherboards for mobile devices. We are also developing sealing materials for IC chips. In many cases, IC chips mounted on ABF substrates are also encapsulated or sealed, and we can propose materials that are compatible with ABF.
We are able to patent many of our technologies, providing a high entrance barrier in terms of intellectual property. From here on, let me present our business strategy in the mid to long-term perspective. First, the enhancement of R&D structure. We'd like to drive this through co-creation with customers. As part of this initiative, we constructed a new research ward last summer, whereby latest substrate manufacturing equipment was installed, and this is based in Kawasaki plant. This does not just only enable material development, but utilizing this facility, this enables us to co-develop next-generation technologies together with our customers at this new building. On page four, I described value chain co-creation ecosystem to be enhanced. In mid to long term, we'd like to realize stable growth for our future.
In 1999, when ABF was first adopted to semiconductor package substrate, since then, it has evolved a long way to become halogen free and miniaturization of PC, some properties were enhanced and also more advancements were made for ABF as well. As a result, high-end semiconductors regard ABF as an essential part. We'd like to maintain this momentum and further contribute to the future evolution of ICT modality going forward. As you are aware, the semiconductor post-processes are mainly handled in Asia. Most of the substrate manufacturers who purchase ABF locate in East and Southeast Asia. To better serve these customers, we set up overseas offices and will ensure we fully support them to assist their business expansion. Meanwhile, to capture the evolving ICT modality beyond 2030, we will set up innovation strategy team in North America in ICT.
In order to establish a closer relationship in California and San Jose, Ajinomoto Fine-Techno USA was set up, and we are connected with our end users to provide technical support and meticulous support to those local customers. Beyond 2030, to capture the evolving ICT modality, at this Ajinomoto Fine-Techno USA, we will set up an innovation strategy team in North America. For future collaboration opportunities with academia and startup firms, we'd like to detect their needs and challenges at an early phase. This slide shows an example of next generation business domain and application. Based on AminoScience, we will provide key materials through our ABF-based development co-creation ecosystem, including neural computing as well as photo computing and quantum computing. Those will be socially implemented. Also, the next generation communication network, 6G, smart city, self-driving car, and decarbonization.
We'd like to make contributions in all these front areas. This is my last slide. In ICT, we will expand and grow our business centered around ABF and ICT in such a way that social values and economic values can be co-created for us to be able to contribute to people's wellbeing. Thank you very much.
Thank you, Mago-san. Now we move on to the presentation by Konishi-san.
I am Konishi from the R&D Planning Department. I would like to talk about the growth strategy for the biopharmaceutical and regenerative medicine culture media businesses. Let me give you an introduction to this topic. This is today's agenda. I would like to cover these topics. First of all, I would like to explain what cell culture media is, because I think you will have a hard time understanding what this means. Secondly, I would like to talk about the biopharmaceutical culture medium called CELLiST, and then explain our regenerative medicine culture medium called StemFit. This carries a separate brand name, so I would like to explain this product as well, and talk about the future of our culture medium business going forward. Now, what is this culture medium?
As you can imagine, human beings can grow only from the intake of nutrition from food, and they grow from a child to an adult. Likewise, cultured cells also can grow by taking in nutrition from this kind of dish-like container. Taking nutrition from liquid containing various nutrients called cell culture media. Ajinomoto cells- Biopharmaceutical culture medium and regenerative medicine culture medium. On the bottom left, the biopharmaceuticals are produced by using cultured cells to create antibodies and other recombinant protein, and then refining them into formulation. This is not part of our business, but this process of manufacturing, in many cases, bioreactor cultivation is done in a size of over 1,000 l. On the other hand, if you look at the bottom right, for regenerative medicine, we grow iPS cells or ES cells and differentiate them to the target cells and formulate them for use.
It is reported that actually the pharmaceutical companies produce these cells, but in the process of this production, differentiation is needed. For that purpose, culture media is used. The bioreactor for this is reported to have a size of up to 10 l in many cases. In both cases, the intake of nutrition in the process of cell culture is indispensable, and that is the reason why cell culture media is needed. Our biopharmaceutical culture medium is marketed under the brand name of CELLiST, and this is suited for cultivating animal cells for the production of recombinant protein. The culture media for regenerative medicine is marketed under the brand name of StemFit, and this is a product specialized for cultivating iPS and ES cells. iPS cells and ES cells have different origins. However, their biological characteristics are quite similar to each other.
It is thus reported that ES cells can be well cultivated using StemFit, because that was already tried out, and it is very verified that ES cells can be cultivated as well. Let me first explain our biopharmaceutical culture medium, CELLiST. From the 1980s, our company has been providing serum-free culture medium based on our clinical nutrition products and pharmaceutical amino cell manufacturing technologies. This is called Ajinomoto Serum-free Medium, ASM Culture Medium for short. In 2012, upon the establishment of Ajinomoto Genexine in Korea, we launched the CELLiST brand and opened a customer service center in Korea, making a huge foray into the biopharmaceutical culture media business. Based on our 36 years of advanced nutritional and metabolite analysis technologies, we have been rapidly developing our cultural medium in line with customer needs, primarily at our customer service center in Korea.
The culture medium is created by many different elements. By producing the amino acids, the key raw material for cultivation in Ajinomoto Group, and supplying them from the manufacturing site in Korea in the form of culture medium, we are ensuring stable and speedy supply to the Asian markets, where we are witnessing a remarkable growth in biopharmaceuticals. As for the business foundation for biopharmaceutical culture media, we established a manufacturing plant in Songdo, South Korea, and also a customer center in Songdo as well as Shanghai, China. As you can see, these offices are centered around the rapidly growing Asian markets. With respect to our biopharmaceutical culture medium, CELLiST, we sell general products as well as custom-made products, so we can provide the most suitable culture medium for the cell of each customer.
In addition, as you can see from the bottom there, through the use of digital twin and AI technologies, we can determine the composition of custom-made products and provide optimization support for the cultivation conditions in a very speedy fashion. In other words, by combining the real-world cell cultivation technology in which we cultivate inside the tubes, and by combining them together with digital cultivation technology, we can find out the best composition and cultivation conditions in a very short period of time. Generally, it takes a huge amount of time and effort to scale up from a few milliliter lab-level cell culture into thousands of liters of actual production. However, a simple scale-up does not work properly, therefore it takes a huge amount of time and effort for scale up.
With the use of the technology that I just mentioned, such as digital twin and AI, we can assist the customer's process development in a very speedy fashion. At Ajinomoto Genexine, we not only produce our own culture media, but also we take outsourcing orders for custom production of culture media based on customers' recipes. From weighing of raw materials, to powdering, to mixing, and to packaging in a GMP-compliant facility, we can manufacture powder culture medium from laboratory scale all the way to industrial scale. The global market for these biopharmaceutical culture media is expected to maintain a very high growth rate of approximately 14% per annum, a very stable growth. In the period between 2020 to 2030, we plan to offer culture medium from prospective customer pipelines, primarily for the fast-growing antibody drugs, and thereby expand the size of our business.
Let me explain StemFit, a cell culture medium for regenerative medicine. We co-developed StemFit together with CiRA, the iPS cell research and application at Kyoto University. CiRA uses StemFit to culture iPS cells. Not only that, it also manufactures iPS cell stocks for distributing to other researchers and developers. iPS cells are sensitive to culture environment, including cell culture medium. It is not easy to switch the culture medium from iPS cells once they are grown in StemFit. In fact, there's no merit of switching cell culture media. Many customers keep purchasing StemFit from us once they receive iPS cells from CiRA. With the expansion of iPS cell stocks at CiRA, StemFit has become a de facto standard cell culture medium in Japan.
Another thing to note for the cell culture medium business for regenerative medicine is that we provide technical and regulatory support in addition to the medium themselves, according to the development stage of customers' pipelines. Seeds are discovered by academic laboratories and medical institutions from their regenerative medicine pipelines. Those seeds are succeeded to bioventures and pharmaceutical manufacturers for clinical development. Once a manufacturing process is established at the upstream of the development phase or process, cell culture medium remains the same even if the developer or those who develop the product may change. If the cell culture media changes, it could change the entire manufacturing process, and it's very hard to control the process. As a result, as customers advance in their development pipeline, they use more of our cell culture media, leading to the growth of our business.
That is why we'd like to provide full-fledged technical and regulatory support pertaining to cell culture media at each critical phase throughout customers' development to help scaling up their pipelines. In the U.S. and Europe, there's no one-stop shop like CiRA, which distributes iPS cells in a centralized manner. Rather, various facilities manufacture their own iPS cells for their own distribution. StemFit usage is smaller in those markets compared to Japan. iPS cells were first discovered by Dr. Yamanaka, originated in Japan. iPS cell-based pipelines originated in Japan, then relocate to overseas for further development after completing the initial or early development phase. In such case, StemFit can be continued to be used. We set up a customer support office in North America, which is our main market for regenerative medicine, to expand the cell culture medium business for regenerative medicine.
When iPS and ES cells are used for regenerative medicine, the cells need to be differentiated for different purposes. On the diagram, upper left shows heart, blood, immune cells. iPS cells or ES cells need to differentiate into different forms of cells, different types of cells. Those cells, in order to differentiate the cells, we need to add growth factors. Growth factors are, for example, if we want to turn those cells into heart, then a signal is given to differentiate those cells into the heart. Growth factors are the protein serving as a signal for the cells to promote their differentiation. Depending on the cell type and differentiation phase, various kinds of growth factors are in need. We offer many different kinds of growth factors together with cell culture media under the brand name of PureProtein.
Based on our microbiology microorganism-based fermentation technology, this technology is enabled. Since Professor Yamanaka discovered iPS cells in 2006, it's been 15 years. The number of clinical trials using iPS cell-based pipelines is increasing. It is expected that the market for cell culture media for regenerative medicine will grow as more pipelines advance through clinical development stages. By 2030, the market will top CAGR 18% as a result. Taken together, we forecasted the entire cell culture media business, combining CELLiST and StemFit, will grow more than eight times between 2020 and 2030. To encapsulate, our cell culture media business utilizes our AminoScience at its core to provide value-added products and services to customers. We'd like to stay side by side with customers in their journey of developing antibody medicine and regenerative medicine. We'd like to grow together with our customers over a long period of time.
That concludes my presentation. Thank you very much.
Thank you very much, Konishi-san. We would now like to move on to the presentation by Okuzumi-san.
Hello, this is Okuzumi from Biopharma Services Department. From myself, I would like to talk about the growth strategy of our Biopharma Services business. Here, these are the topics that I would like to cover today. I would like to first give you an introduction of the overview of the Biopharma Services business division, also talk about the oligonucleotide contract manufacturing business that is growing rapidly. After that, I would like to talk about the ADC drug discovery and manufacturing service that is seeing a heightened demand. To finally talk about the initiatives for new value creation briefly. I would like to give you an overview of the Biopharma Services Department.
As you can see here in this slide, this shows Ajinomoto's Bio-Pharma Services business, including the historical development. Ajinomoto's Bio-Pharma Services business started in 1989 with the acquisition of Ajinomoto OmniChem. Thereafter, we rolled out small molecule drug contract manufacturing in Tokai and established a manufacturing plant in India to expand our business with a primary focus on small molecules, which account for the bulk of pharmaceuticals categories. In recent years, through the acquisition of Ajinomoto Althea, Inc. of the U.S. and GeneDesign, Inc., we constructed a structure for contract manufacturing of advanced pharmaceutical modalities such as oligonucleotides, protein therapeutics, and antibody-drug conjugates. Furthermore, we acquired aseptic filling and formulation capabilities. From 2020 onwards, we have been working to expand our business by creating synergies between different sites under one brand of Bio-Pharma Service.
To accelerate growth in the future, we plan to effectively utilize these tangible assets as our business foundation, while also advancing our solutions, leveraging our unique technologies and services such as flow chemistry, AJIPHASE, CORYNEX, TALAMAX, and AJICAP. In this journey, we will not only pursue scale, but also aim to enhance value by strengthening the business that only can be provided by Ajinomoto. This shows our global footprint of Ajinomoto Bio-Pharma Services. In Japan, we have four locations, including the headquarters. We have a research office in Kawasaki, where new technical values are created. The Tokai office is the main location for oligonucleotide production using AJIPHASE. In Osaka, we have the office of GeneDesign, Inc., which is a CDMO dedicated for oligonucleotide. In Belgium, we have the largest manufacturing plant of Ajinomoto Bio-Pharma Services, which is called Ajinomoto OmniChem.
This plant is mainly contract manufacturing small molecule drugs, but recently it is also showing uniqueness as a plant for flow chemistry and AJIPHASE. In India, we have a wholly owned subsidiary of Ajinomoto OmniChem, Ajinomoto Bio-Pharma Services India, which is mainly handling contract manufacturing of small molecule drugs. In San Diego, U.S., there's an office of Ajinomoto Althea, Inc., which can handle large molecule APIs and aseptic filling. Next, I will talk about the contract manufacturing of oligonucleotide, which is growing rapidly nowadays. Nucleic acid-based drugs are drawing attention as a new modality after antibody drugs because it combines the benefits of mainstream small molecule and large molecule drugs in terms of the ease of production and pharmaceutical efficacy. Accordingly, the contract manufacturing market of nucleic acid drugs is expected to grow significantly.
Among nucleic acid drugs, in the contract manufacturing market of oligonucleotides targeted by Ajinomoto Group, the main competitors are Nitto Avecia, which holds solid-phase synthesis technology, and the U.S.-based Agilent and Germany's BioSpring. Among these players, Nitto Avecia is the frontrunner, but we believe Ajinomoto has grown to the number one position in the oligonucleotide business together with Agilent. However, for our future growth, how to differentiate ourselves will become very important. The slide here summarizes the strength of our oligonucleotide contract manufacturing service. Companies other than Ajinomoto are producing oligonucleotide using the solid-phase synthesis method, which offers the benefit of shorter production period. However, solid-phase synthesis has issues in terms of scalability, and there's a limit to the volume of production in just one batch. On the contrary, our unique technology, AJIPHASE, can use the same large reactor as small molecule.
For example, when a 10,000-l reactor is used, it is possible to produce oligonucleotides in a scale of over 100 kg in one batch. In other words, the larger the scale, the greater the benefit. Because every item starts from small scale, we thought it was necessary to have a solid phase synthesis in order to enter the market from early on and to acquire items. That's the reason why we acquired GeneDesign in 2016 to obtain the solid phase synthesis capability in addition to AJIPHASE. The combination of these technology will make us the only oligonucleotide CDMO in the world that possess both solid phase synthesis as well as the liquid phase AJIPHASE technology for oligonucleotide production. This offers us the strength to provide the best solution to serve customers from only a few micrograms to over 100 kg.
Here, I would like to introduce the breadth of the targets of our oligonucleotide contract manufacturing business. In the oligonucleotide market, different types of oligonucleotides are used depending on the applicable disease or the actions in the body. Among the different categories, the main target so far has been the antisense group of oligonucleotides. Antisense accounts for slightly less than half of the clinical pipeline in the market. However, the pipeline of a group called siRNA is the second largest in the percentage of oligonucleotide types. Accordingly, to approach this siRNA market, we tackled the development of a proprietary manufacturing method leveraging the advanced technology we accumulated in AminoScience and formulated a new method. Service utilizing this new method are already offered to a number of pharmaceutical companies.
As a result of establishing this new manufacturing method, we can cover approximately 80% of the clinical pipelines in the market, and the applicable disease are expanding from previously only rare diseases to now cancer and metabolic diseases, where the number of patients is greater. Going forward, we'll reinforce our business leveraging Ajinomoto's unique technology services and other intangible assets and provide greater added value and accelerate our growth as a result. As for the sales forecast of oligonucleotide contract manufacturing business, we have revised the outlook upwards compared to what we explained in August last year. In 2030, the sales is projected to increase by 25x compared to the level in 2016, when we acquired GeneDesign. Oligonucleotide contract manufacturing service has grown into a large business thanks to the acquisition of multiple pipelines of AJIPHASE.
In AJIPHASE business, it is possible to expand the production capacity with a little amount of investment by converting the existing generic synthesis facilities. Currently, we are converting a part of our small molecule facility into AJIPHASE facilities to make a transition to high value-added per business model. We plan to accelerate this growth and use this as a driver for the next phase of Ajinomoto's business expansion. We cannot comment on the details behind this growth projection because it relates to our customers' information. What we believe, these are very practical targets when the current pipeline development stage and risks are taken into consideration. From here, I would like to talk about the ADC, drug discovery support, manufacturing support service, where the demand is beginning to mount.
First, let me provide the ADC market overview with this slide. ADC is a group of medicine consisting of antibody drug conjugates, in which an antibody is linked with an anticancer drug. Antibody is designed to selectively binds to a certain types of cell, cancer cells and is loaded with anticancer drug. This enables the selective binding and delivery of cancer drugs with cancer cells. It is like a rocket loaded with anticancer drugs that are guided towards cancer cells. The ADC market is increasingly growing, as the graph indicates, left bottom. The market size is expected to top JPY 25 billion, 2.5x greater in 2032 versus 2022. As for the number of approved drugs, in 2011 and 2013, first generation of ADCs were approved. After some stagnant years, the number of approved drugs suddenly surged since 2017. This drew attention.
As a result, many companies have started entering and developing ADCs, the number of those in pipeline is significantly growing. Approximately 150 ADCs are in clinical development pipeline. This slide shows issues pertaining to ADC drug discovery and the values offered by our proprietary technology, AJICAP. AJICAP, in one word, is a groundbreaking technology that can easily generate a site-specific ADC possessing high therapeutic effect and safety, the details will be reported from now on. Conventional ADCs have different binding sites to cancer drugs at random on their antibodies, therefore, the number of drugs loaded differed. Therefore, a mixture contained some unstable ADCs releasing cancer drugs before reaching cancer cells, causing damage to normal tissues. As a result, side effects emerged. Also, because it was a mixture, quality control was difficult.
In contrast, AJICAP enables the selective binding of an anti-cancer drug to a specific position on the antibody. This way, the technology can easily generate a stable site-specific ADC. This led to a significant reduction of side effects because it does not release the drug until it reaches cancer cells. It excels at generating safe ADCs because even at a high dose of AJICAP ADC, has little side effects. Also, AJICAP-based ADC has a consistent structure, making quality control easier, which is also advantageous for the development. As I mentioned in my previous slide, AJICAP is a technology that binds an anti-cancer drug to a specific site of an antibody. On the diagram on the left, you may think that the antibody has a simple structure. However, it actually has an extremely complex structure consisting of about 1,400 amino acids.
Therefore, to develop AJICAP-based ADC that binds certain amino acids to anti-cancer drugs was technologically demanding. To solve this technological problem or issue, we made maximum use of the advanced technologies we have accumulated in AminoScience. This is a typical example of how we have converted our intangible asset, the advanced technological capabilities of AminoScience, into business value. AJICAP technology has been rated highly both domestically and internationally, including a high evaluation in the Nature Index, which profiles world-class research results, and being selected as the best publication from more than 900 candidates at the World ADC, the world's largest academic conference in the ADC field. As a result, we are receiving more and more inquiries and orders from ADC creation. In this slide, I'd like to introduce the expansion of a wide range of application services utilizing AJICAP.
The mainstream ADC has been ADCs that link antibodies to anti-cancer drugs, as was shown in the previous slides. However, in recent years, new modalities such as oligonucleotides, peptides, and proteins have been attracting attention as new modalities. The creation of these modalities can be realized by combining AJICAP with AJIPHASE, CORYNEX, and TALAMAX, all of which are our technologies. We are actually receiving an increasing number of orders from our pharmaceutical customers for these new modalities. The ability to provide services by combining several of our technologies means that we can synergetically increase the business value of our technologies. Therefore, we are actively developing our business in order to aim for further adoption. In the development of ADCs, it is necessary to flexibly adjust the number of binding depending on the type of drug, the potency activity of a drug, and the indication.
Through further development of AJICAP technology, we have made it possible to precisely control the number of drugs bound to the antibody from one to 10 or more. By taking advantage of wide-ranging AJICAP applications, we will continue expanding ADC drug discovery support and manufacturing services that flexibly meet the diverse needs of our client pharmaceutical companies. This slide shows a business model of our ADC drug discovery support and manufacturing services. Our ADC drug discovery support and manufacturing services using AJICAP are provided from ADC creation stage or development stage, which is the initial phase or early phase of development for our clients. We receive antibodies and drugs from our customers and synthesize ADCs based on AJICAP, which are then evaluated by our customers. This process is repeated several times to optimize the ADC in consultation with the customer.
Once an ADC is obtained or manufactured, we conclude an AJICAP technology license agreement with the customer, then proceed to manufacturing and clinical trials. Our main revenue comes from upfront milestone royalty revenue, which is paid as a compensation for our technology license. We also provide CDMO support and manufacturing services at Ajinomoto Althea in San Diego, depending on customers' requests. By making technology license fees the main source of revenue, we have realized the asset-light business approach that leverages our intangible assets. AJICAP technology licenses have also been provided to several customers, including U.S. Bright Peak and Exelixis in the U.S., which were disclosed before. We will continue refining our technology to meet the needs of our customers and aim to increase the number of companies to which we license our technology through active business expansion.
Finally, let me briefly introduce our unique initiatives that are underway in CDMO business. Today, I presented AJIPHASE-based oligonucleotide contract manufacturing business, as well as AJICAP-based ADC drug discovery and manufacturing business. In addition, we'd like to grow businesses that follow these two. We have CORYNEX as a protein medicine contract manufacturing service, which has been established as a practical and commercialized technology, and TALAMAX, both of which may serve as growth drivers following AJIPHASE and AJICAP. Furthermore, we'd like to create new businesses utilizing mRNA based on RNA fermentation technology, and to establish a new cell therapy technology in order to attain a significant growth in biopharma business toward 2030. This is my last slide. By maximally utilizing Group's intangible and tangible assets we have acquired so far, we will further the growth of a biopharma business by enhancing business and services.
We'd like to differentiate ourselves going forward as well. That concludes my presentation. Thank you very much for your kind attention.
Oshimura-san, thank you very much. We'd like to entertain questions from the floor.
Thank you very much for the question. We have a question from Saji-san of Mizuho Securities Co., Ltd.
Hello. Thank you very much. I have a question relating to healthcare, the last part. There was something that came to my mind, so I would just like to reconfirm. It was on page 19. The contract outsourcing outlook in 2023. CDMO, last year had a sale size of JPY 72 billion, and we believe that this is expected to grow at a certain pace this year again. How is it different from what is written here? Can you elaborate on that point? Also, out of this JPY 72 billion CDMO sales and this contract business of Ajinomoto Group's projected here, it says JPY 20 billion in fiscal 2022. Are these two identical numbers?
In 2025, what are the growth drivers towards 2025? Would it be AJIPHASE and AJICAP you mentioned today, or other things listed up here? Would that be correct? Can you confirm those points first and foremost?
Saji-san, thank you very much for the question. This will be answered by Shiragami-san. This relates to the details of the business, Otake-san should be better positioned to answer this.
This is Otake from Biopharma Services Department. In 2023, for fiscal 2023, AJIPHASE, AJICAP that I introduced to you today, we are expecting a significant growth in 2023 for these two products, and we have a good prospect to achieve that. On the other hand, OmniChem. At OmniChem this year, flat growth is projected for this year according to our plan.
The reason for this is because, for AJIPHASE, they are modifying some of their facilities, this year the growth will be slow this year. However, from next fiscal year onwards, we are expecting a significant growth. Towards 2030, the growth drivers will be AJICAP, AJIPHASE. Those will be the primary driving force for growth towards 2030. Also OmniChem also has flow reactor technology, their unique technology, and that is likely to make a big contribution to business profit. Thank you.
Thank you very much for that. The JPY 72 billion that we just mentioned, you disclosed that number as the contract manufacturing scale. Is that identical to JPY 200 billion in this chart?
That should be considered as identical. Thank you.
Thank you. Thank you very much. My second question relates to the question for Mr. Mago from Fine-Techno.
On page 12 of your presentation, ABF technology, core technology deployment. Mr. Fujie also mentioned that for the magnetic materials, that will make a contribution to power saving. That has already achieved a track record in the last one to two years, according to the statement by Fujie-san. ABF-RCC, you mentioned that this will be applied for smartphones, which is an area that you are not really making a significant contribution so far. This magnetic material, ABF-RCC sealing materials. Can you talk about the plans as to how you establish a competitive advantage in this area, and how will this contribute to your business expansion going forward? Can you elaborate on that point? For example, this year, right now we are seeing some prospects in the magnetic materials, I believe.
For electronic materials, you disclose Functional Materials, and that has a track record of JPY 70.1 billion last fiscal year. What is the impact of these materials right now? How will this impact as a driver for growth in the business in the future? Thank you.
Regarding the business contribution and for sales contribution, I'm very sorry, but these information are not disclosed by the company. Server data centers consumes a huge amount of energy and power, magnetic materials are expected to be very effective, and customers are showing great response and great acceptance. We believe we shall be able to make a great contribution to our business. RCC is used as a semiconductor package and the insulation performance in the motherboard is going to be necessary in the future. Therefore, we have high expectations that this can be contributing to that effect.
If you can just single out the magnetic material, let's say out of your total sales, what is the proportion of this contribution in terms of %, and how significant it will grow in the future? Can you just talk about that? We are sorry, this is not something that we disclose as a company. I hope that you one day disclose that information. Thank you.
Sorry, San. Thank you very much for the questions. We'd like to move on to the next question. Fujiwara San.
Thank you very much. This is Fujiwara speaking from Nomura Securities. I'd like to raise two questions. First, with ABF, I'd like to deepen my understanding. On page eight, this is a presentation from Mago San. On the right-hand side, you described that ABF shipment volume growth, that graph. For FY 2022, what was the figure or volume on this graph for FY 2022? Also, FY 2025, during 2023 and 2024 and 2025, how will these sales grow? Or excuse me, shipment volume grow in the next three years. In short term, ABF substrate, I think you are still struggling with ABF shipment. Do you expect a huge recovery in 2025? How will things trend during the 2023 to 2025 period of time?
That is my first question. The second question pertains to the cell culture media. I'd like to educate myself. This is a very fresh material. To educate myself, on page 17 of your slide, for the biopharmaceuticals and regional medicine sales figures. I just want to know the size of the sales for FY 2022, which you just closed. Those two are my questions.
Thank you very much for the questions. First, I'd like to address the first question. This is Mago speaking. In terms of sales figures, we cannot actually, unfortunately, disclose details. However, during my presentation, I reiterated that this AI and server network and centers, high performance computers use significant amount of ABF. That is why we expect that the shipment can grow significantly, and we have high hopes.
This is Fujie. I'd like to expound on the matter. Previously, we indicated that in 2023 or mid year of this year, there will be some inventory level adjustment which could slow the shipment of ABF. However, after the second half of 2023, recovery will emerge. That is the customer feedback we get. Assessing the level of customer inventory. After second half of 2023, things will go back on track and recover the trend. There are various moving parts and things remain quite uncertain. Even if the recovery is made, then we may have a surge in the incoming orders. Therefore, we needed to make sure that we can capture the demand and we can respond to the demand. We are investing JPY 25 billion in terms of CapEx investment to make sure that we can be prepared for the sudden surge in demand.
Second question will be dealt by Maeda-san regarding the cell culture.
Unfortunately, we cannot disclose the details of each brand sales figures, especially because we are dealing with a custom-made cell culture medium for pharmaceutical companies. Therefore, we cannot actually disclose on an individual basis, and some of them are in clinical stage. Therefore, the business size is not so sizable yet at this stage.
This is Shiragami. I would like to expound on the matter.
In terms of regenerative medicine, as you are aware, the market is about to boom or about to grow depending on the clinical development phase as they advance. We would like to contribute to the growth of the market for regenerative medicine.
Thank you very much for the explanation.
Thank you, Fujiwara-san. The next question will be from Daiwa Securities, Morita-san, please begin your question.
Hello, this is Morita from Daiwa Securities. I've got two questions. The first is about the biopharma, page 10 of the presentation. You said that oligonucleotide contract manufacturing is expected to grow. If I can just develop an image from 2025- 2030 as huge growth is projected, is this dependent on a certain pipeline? First and foremost, how many pipelines do you have right now?
When there's a steep increase towards 2030, is this dependent on a few number of pipelines, or is it so that there is a general increase across multiple pipelines? I just wanted to know what is the image of the pipelines, the number of pipelines that will drive this growth. If you could just elaborate and give some color to that'll be appreciated. My second question, I think I've asked a similar question in previous session, for the ICT or for bio, I think you have a very ambitious plan for the future, and that's very encouraging to hear the ambitious target. Of course, this is business, so there are some uncertainties. If you dare try to project the future over the mid to longer term, what are the risks that you perceive right now?
If you can just talk about the risks, if you just pay attention to that, what are the potential risks that we have to bear in mind? Can you share that with us?
Hello, this is Otake. I would like to answer your question. Regarding your first question, regarding the pipeline, the number of pipelines. At this moment, multiple pipelines are up and running. With AJIPHASE alone, there are multiple pipelines, and the risks are already factored in our plan. Therefore, we believe these are well achievable as a target. The dependency on the certain pipeline is not the case in our plan.
As for the second question regarding risk, is that only related to biopharma, or that's about overall, including biopharma business?
Thank you very much, Morita-san, for your question. I would like to answer that question.
Regarding the risks, for this ICT and healthcare domains that we covered today, the risk that we have to be most aware of is about how to capture the trend of modality ahead of the time. That is going to be the key element. In that regard, innovation strategy team, we have established this global team so that we have all these people with that kind of foresights. They are working together with the people in the academia and other fields so that we can strengthen our capability in this area. The other thing, be it ICT or be it healthcare, the speed of the modality evolution is taking place quite rapidly. We have to accelerate the speed of our development as well to keep abreast with that, and that is the potential risk.
Therefore, we would like to leverage a lot of digital technology and improve the efficiency of our R&D activities in order to accelerate the pace of our development. When it comes to the medical modality for medicine, for example, when it comes to regenerative medicine, at which time in this modality change will happen, it may be belated than what we had anticipated. When speed accelerates or slows down, including all these potential scenarios, we have to be a connoisseur to be able to discern that. That kind of response will be needed. For that purpose, we have to have an efficient business model so that we can eliminate wasteful capital expenditure so that we don't get affected by such changes in the market.
Of course, on the other hand, when it comes to the electronic materials, we have to be able to respond swiftly to any surge in demand. Those are the important elements when we think about risk-taking.
Just one thing, Shiragami-san. I do understand your explanation regarding modality, but I think your competitors are also thinking about similar things. If you just can identify your advantage over the competition, that would be appreciated.
Yes. Thank you very much for the question. Exactly as you pointed out, this is a growth market and the competitors are also going to come into play because we are now looking at a very attractive target in this market. As I said at the beginning, our advantage is the strength that we have accumulated with the AminoScience.
We have a track record of over 100 years in this field. We have our own unique strength in this area. For these strengths, I think we will never be inferior to the competition in these strong points. When it comes to new businesses, it's not that we are going to start everything from scratch. We would like to leverage the strength that we own in AminoScience, and we have the business foundation already, including tangible and intangible assets. We would like to leverage them and take advantage of them and connect these assets to the next business. I think that is one of our strengths.
Encounter the new entrants from the green field, I don't think we are inferior to them. We don't think we will be defeated by them. By concentrating our resources, we would definitely like to win in the game. That's our approach.
Thank you very much for your explanation. I understood very well.
Morita-san, thank you very much for the questions. Now, we'd like to take questions from Takagi-san, SMBC Nikko Securities.
Nice to speak to you. This is Takagi speaking. I'd like to raise two questions. These are very basic questions, but I'd like to educate myself. Regarding the cell culture media. Thank you very much for the presentation. This was very wonderful and easy to understand. Speaking of the cell culture medium business, on page 17, I'm looking at. In 2025 and 2030, between those periods, the sales forecast is accelerating between 2025 and 2030.
Why is this? Could you elaborate on this matter? You mentioned that the region of medicine may be accelerating, but could you please repeat the explanation? What is the competitive landscape for the cell culture medium? What is your strength and what is your weakness? Could you clarify these points? That's my question pertaining to cell culture media. I have another question. Regarding biopharma service, oligonucleotide on page nine. While oligonucleotides, the nucleic acid types may diversify in the future, siRNA can be expanded or explored. If so, then does that solidify your AJIPHASE competitive advantage by expanding the targets? Does that change or affect your competitive advantage of AJIPHASE if you expand into siRNA?
Thank you very much for the questions, Takagi-san. I'd like to provide an overview, then I'd like to appoint Maeda-san and Mike to follow up on the specific answers.
Regarding the reason why a rapid growth is expected between 2025 and 2030. This covers both cell culture media for biopharmaceuticals as well as regenerative medicine. For the cell culture of biopharmaceuticals, as Konishi-san indicated, India and China can grow the volume growth and can lead the volume growth. For regenerative medicine cell culture, as I mentioned earlier, the development stage as well as pipeline could expand all of a sudden in the future. We forecast that, which is reflected in this sales forecast. Regenerative medicine is going to make a significant or more contribution, after 2025 compared to the cell culture media for biopharmaceuticals. That is my view.
Yes. I think my comment will be overlapping with Shiragami-san's comment. Regarding the cell culture media for biopharmaceuticals, the market is expanding.
India and Asia, we can provide a high-quality cell culture media to attract customers. Regarding growth, regenerative medicine, in few years' time, well, clinical trials are on, and there are many promising ones that which could drive a significant growth after 2025. That is our expectation. Regarding the competitive landscape, Thermo Fisher Scientific, STEMCELL Technologies, those are quite formidable or big players. We are competing with them. Our business unit leader manager, Mike Lish, is present with us, so we'd like to turn the baton to Mike-san. Could you please expound on this matter?
Sure. I'd like to expand on the competitors. Maeda-san's comment on regenerative medicine with Thermo Fisher and Stemcell, Merck and Cytiva are also main competitors on both landscapes, both for cell culture media and for regenerative medicine. I think your question was, what are our strengths maybe against these competitors? I'll reference back to the slides before. We own the supply chain all the way from the raw material ingredients, the amino acid, through these growth factors, all the way to manufacturing at AGX and the optimization of the media itself. That is a very unique position that Ajinomoto has from our technology standpoint. That really sets us different from the competition, and we can actually provide a significant value in solutions to the customer. Thank you.
Regarding the question on biopharma service. On page nine. Your question pertains to page nine of my presentation. Today, I mentioned I didn't actually provide the details of the technology here on the slide, this is AJIPHASE-based synthesis and CORYNEX-based enzyme will be combined to establish a highly unparalleled technology proprietary to Ajinomoto. Speaking of a business opportunity, this is all about antisense, which is half the size of We were only able to cover half of the antisense, with this technology, we can actually cover three-fourths of the entire targets with siRNA. After this technological advancement, there will be two benefits. One is that we can stabilize the quality of a product and enable our steady production supply. Another benefit, although I cannot disclose the technological details, process-wise, this is very easy. Therefore, it can minimize the manufacturing risks along the line.
That is another merit that we can enjoy. I'd like to supplement what Otake-san just mentioned. When you look at antisense, which is a single-strand DNA, and siRNA is a double-strand RNA, as you can see, siRNA is more difficult to synthesize. The stability declines with siRNA. That is where we can utilize our own technology by overcoming these difficulties associated with siRNA. This could double the size of target size. When it says indication, antisense used to deal with rare hereditary diseases, with siRNA, we can further expand into cancer and metabolic diseases. Volume wise, if a successful pipeline we have, we can actually expand the business quite significantly with just one successful case in the pipeline. Takagi-san, did I answer your question? On top of AJIPHASE, you are going to use CORYNEX to create even further value-added technology and item.
Yes, that's right. Not only AJIPHASE, but also CORYNEX and other bio capabilities that we have accumulated will be utilized to create this hybrid technology for siRNA. What is your competitive advantage with siRNA? Is it the same for AJIPHASE as AJICAP? Sorry that we were confusing you, compared to our competition, siRNA is difficult to be synthesized, but we can actually manufacture it with high efficiency and in high stability in large quantity. That confers our competitive advantage. Thank you very much for your explanation.
Thank you, Takagi-san. The next question from Mitsubishi UFJ Morgan Stanley. Tsunoyama-san, please begin your question.
Hello. Thank you very much. My name is Tsunoyama from Mitsubishi UFJ Morgan Stanley. I have two questions as well. I'm sorry that I'm not so informative about this topic, so I just wanted to confirm your approach. One is about your cell culture business, culture medium. I heard that you are very competitive, and I understand your point. Maybe this is not covered in today's presentation, in your food business, what is the strength that can this technology offer in your food business? If you can just share some thoughts about that would be appreciated. My second question relates to ABF. The future risks pertaining to ABF. Of course, we talked about the short-term inventory adjustment things and so forth, set aside that story.
The competitive landscape in the manufacturers are now changing, in a single value chain, if you're just tilted and skewed towards one customer, do you have that kind of risk today? I just wanted to reconfirm your views on that. That would be appreciated. Thank you.
Tsunoyama-san, thank you very much for your questions. Regarding your first question regarding green food, this is Shiragami, and I would like to answer to that point. Green and food and wellness in these areas. The next presentation is scheduled for December. We are going to have another business briefing covering two areas in more detail.
In the area of green, taking this opportunity of sustainability, we would like to drive innovation leveraging AminoScience so that we can achieve coexisting with earth and lower the impact on the environment, and create a new standard for food for the next generation, and thereby contribute to the wellbeing of society, people, and our planet. That's the basic approach and philosophy that we have. What this means in more detail is that those green food, based on new approaches, we would like to establish new standard for food. In addition to that, as for the precise content, the flavors, the fermentation bio-cycle, we will have a green process by having green Ajinomoto process.
For green food, alternative protein quality improvement solutions is also considered. Right now, we are expanding the precision fermentation technology and regenerative agriculture. Those are also expanded. Through these measures, we would like to reduce the environmental burden and also secure alternative protein. Those are the major initiatives that we are planning to expand as business in the future.
As for the second question, this will be answered by Maeda-san.
Okay, this is Maeda. I would like to answer. Regarding the future risk pertaining to ABF business, that's how I construed your question. As we have been reporting from previously, we have more than 90% market share with ABF. It's not that we are depending on to a certain customer, there is therefore the risk of losing significantly by the concentration of a certain sector is very minimal. The JPY 25 billion investment is planned for, so that we can be prepared for the recovery of the market. I was thinking about two points.
Right now, we have more than 90% market share, but the risk of two or three companies coming on board who can produce similar products. We would like to therefore continue speedy development so that we can offer the best product in a faster manner compared to the competition, so that we can reduce the risk by doing this initiative. The other one is the optical and electric conversion. That could be a major game changer, changing the entire rule of the game. The optical and electrical could be converged together, or maybe electricity can all be converted into, and switched, and made a transition to optical solutions in the future. When that kind of game change happens, we shall never be kept behind.
Maybe this is going to be further down the road, like 10 years ahead, but for those potential game-changing elements, we are now continuing our research.
Thank you very much, Mr. Maeda-san. If I just add one more comment here. If you look at this page, the next page, in the ecosystem of ABF, I just introduced this slide. Semiconductors after all is a very high-precision device, which guarantees high performance. In the entire manufacturing value change, the performance and the precision is realized throughout the entire value chain. Amid that environment, ABF, in order for the semiconductor to exert its performance, ABF is playing a very important role. If anything similar to ABF comes out in terms of a smaller scale, temporarily, even that happens in the entire ecosystem.
Semiconductor manufacturers switching to those new products is quite risky, because if anything happens, all the high performance delivered by the semiconductor will be undermined, and they shall not be able to deliver the expected performance. We were able to come into this market first ahead of everybody else, and we continue this fast development cycle and have a strong collaboration with the semiconductor ecosystem and led this entire value chain. Based on this track record, the risk of us being switched over by any other manufacturer is very minimal, if any. For future evolution, we are receiving high expectations for the evolution in the future by many ecosystem players. The risk is rather being unable to keep up with the evolution. Therefore, we are committed to making positive contributions to this evolution of the technology.
We are making necessary resource investments in order to achieve that.
Thank you very much for that comment. If you come back to the green food topic once again, maybe this is out of the scope of today's discussion, but when you talk about the bio meat in the future in 2030, maybe this will become already a viable business by 2030. When that's taken into consideration, this culture media technology, will that be a source of your competitiveness for bio food or bio meat? Well, that's a very good point.
Exactly. As you pointed out, the synergies between different areas is going to be great. As for the growth factors and also for the culture medium, those technologies will be very important. Because we deal with many bio meat players, of course, the production of bio meat ourselves, we are involved in that process.
For the manufacturing and production of bio meat, and also when it comes to the quality of bio meat, I think our culture media will have a very positive impact, and I think our technology will be taken advantage of in order to bring down the cost, and also to ensure quality. We believe we can lead to affordable products, and I think AminoScience has a great role to play there.
Thank you very much. I understood very well. I look forward to the presentation briefing session in December. Thank you.
Tsunoyama-san, thank you very much for the questions. Now, we'd like to entertain a question from Wakao-san, JPMorgan Securities.
This is Wakao speaking, JPMorgan Securities. I'm responsible for pharmaceutical sector. Thank you very much for the intriguing presentations today. siRNA and ADC, those are my questions. If we look at the pharmaceutical sector, the siRNA and ADC both are hot topics. Regarding siRNA, of your contract manufacturing projects, what is the number of inquiries, and what is the most advanced, or is there any products that are being launched with the siRNA? And what is the share for siRNA market?
Wakao-san, thank you very much for the questions. It relates to customer information, therefore, we need to observe our relationship and most of which cannot be, unfortunately disclosed. But Otake-san, could you please answer to the extent you can?
Yes. Regarding the technology, this is very brand new, and we are actually advertising this or touting the technology at academic conferences.
In early stages of clinical process, there are many inquiries, and we are offering samples to customers. Going forward, we hope that we can expand this business so that it can contribute to profits going forward. Because it pertains to customer information, we cannot disclose, unfortunately, any further details.
I'm sorry. Thank you very much. Regarding ADC, Mega Pharma and as well as Daiichi Sankyo, they started their own development of ADCs. My question pertains to your linker technology, where you excel at. What is your competitive advantage with the linker technology? Compared to Daiichi Sankyo and Mega Pharma, they have their own technologies. Compared to them, what is the strength of your linker technology? Technology-wise, maybe that you are at par with others, but the target is your pharmaceutical companies who only have antibodies, but do not have a linker technology. What is your strategy?
Technological-wise, what is the value? Royalty ratio, royalty revenue will be the testament to the technical value that you are offering. Starting from this early phase in research, this royalty, if the IP value is quite significant, then the royalty revenue may be significant. Is it just a single-digit royalty revenue that you are enjoying? What is the level of your royalty revenue? You have this contract manufacturing service as an option, as an optional service. If this product is successful to generate certain profits and sales in the future, then speaking of this contract manufacturing potential, what is the size for the potential contract manufacturing business?
Wakao-san, thank you very much for the number of questions. You are well-versed in this area because you're the connoisseur in the healthcare market. Let me first address your question about the linker technology.
Speaking of the types of linkers, rather than that, we focus on affinity. That is the specific location on antibody payload, as well as linker need to be bound. That involves affinity technology, where we excel at, and this characterizes AJICAP. Whether it be linker or payload or the type of antibody, we can exert our flexibility with this technology. A certain amount or present number of drugs can be attached to antibodies by other technologies. In that case, the antibody itself must undergo a certain modification or processing. It is cumbersome with other technologies. AJICAP is a very easy-to-use technology, easy process, simplified process to ensure site-specific and number-specific payload that can be attached to the antibody. Okuzu mi-san presented earlier. During the screening phase, we work with customers to optimize drug discovery, right at the start from the screening phase.
We'd like to further expand this business utilizing those strengths. Another question regarding the royalty ratio or royalty rate, which cannot be disclosed. Speaking of royalty, we receive an upfront amount and milestone amounts or payments, both of which are set with customers. As the development phase advances from clinical to product launch phase, the revenue or return we receive can expand or can grow. Those are the conditions applied to each customer. Ohtake-san, could you please answer other questions?
Yes. I may be overlapping with Shiragami-san, but on the part of us, the IP value is quite significant with AJICAP because. Excuse me, AJICAP and CORYNEX, AJIPHASE and CORYNEX, all of which are excellent technologies. The target medicine and customers need to be manufacturers through CORYNEX and other technologies of us. AJICAP is the designing technology for medicine itself.
In a sense, we are creating the medicine by ourselves, by our technology. If you don't have AJICAP, this target medicine cannot be manufactured. It's so essential, and that's why it poses a significant value, and that's why royalty revenue would be much higher than the value you're anticipating. We already concluded certain contracts with companies. The royalty revenue was set quite high. Thank you very much. Let me confirm. I think this technology is widely applicable, but you are dealing with mega pharmas, not just the biotech firms, but mega pharmas as well. Yes, we have a large customer base, and globally, a few dozen customers are in direct negotiations. Thank you very much, and I truly look forward to your future advancements of this technology.
Thank you, Wakao-san. Next question from Nomura Securities. Matsubara-san, please begin your question.
This is Matsubara from Nomura. Do you hear me?
Yes, I hear you.
I also have two questions. The first is about the growth factor, recombinant protein. You're using this to academia or companies use StemFit, or is it the customers who are using whatever technology, whatever cell culture medium. As for the differentiation in the future, the launch is going to be very important. Therefore, what is the timing of launch that you're contemplating right now? For each product, StemFit quality, is that what you're producing? Can you just confirm on these points?
Matsubara-san, thank you very much for the question. Mike-san and Konishi-san, can you answer these questions if you can?
I will give the first answer, and Konishi-san can follow. Your first question on growth factors on where they are going today, we are actually actively selling these growth factors that are highlighted in blue ink, I believe, on page 15. As you can see on the coming soon and under development, we are not at liberty to talk about the schedule at this time. Konishi-san.
Well, this is Konishi. I would like to add some comments. For the GMP products, actually, this is regenerative product for GMP qualify, so therefore GMP compliance needed. So in a phase approach, we are going to provide products that are GMP compliant over time. Thank you very much.
Thank you very much. We are moving close to the closure of this QA session. So next question will be the last. Ami-san, JPMorgan Securities.
This is Ami speaking from JPMorgan. After expert professional question, I have a very basic question. Regarding the overview of CapEx, in ICT in 2023, you are going to invest JPY 25 billion, as you announced in the 2030 roadmap presentation. In over what period of time this JPY 25 billion is going to spend? According your presentations, you are actually observing the risk and trying to prevent the risk of falling short of the surge in demand. So what portion of JPY 25 billion is going to be spent this year? Also in the healthcare arena, sales forecast is very optimistic and very rosy, and I truly look forward to that.
As you face, you were converting the existing facilities that are used for small molecule, but that was the case to minimize your investment. Will the situation continue to be the same with AjiPhase? We have now newly emerging technologies evolving, so are they going to require a significant amount of CapEx going forward?
Thank you very much for the questions, Ami-san. Maeda-san, would you like to answer those questions?
Yes. Thank you very much for the questions. Regarding CapEx, I am an expert of the money or CapEx. Speaking of electronics materials, JPY 25 billion is going to be the CapEx investment. Towards 2030, this figure remains the same until 2030, but depending on the market condition. The market is advancing, so if necessary, we will be flexible in terms of increasing. We can even increase the amount of any further down JPY 25 billion.
JPY 25 billion should be enough until 2030. Regarding AJIPHASE, the amount of investment, as we explained today, at Ajinomoto OmniChem, there is a production facility in India as well. We are concentrating all the small molecule production. At OmniChem, AJIPHASE is going to be expanded. We are fully utilizing the already invested and existing facilities and equipment to achieve the best efficiency so that we can maximize our output for AJIPHASE. That is our plan. Therefore, during this period of roadmap, the planned investment will suffice until 2030. How about the later technologies, AJICAP and cell culture? Is my understanding correct that there will be no significant investment increase involving this arena? Cell culture, as the regenerative medicine market grows, by 2030, we may need to make a necessary investment. That's quite likely.
With AJICAP, because it's license-oriented business, we can actually handle mainly with the intangible assets, and ROIC is quite high with this technology. I understand. Points to be noted is the cell culture media CapEx.
Yes, that's right. From the perspective of CapEx, yes.
Thank you very much.
Thank you, Ami-san. With this, we would like to finish the Q&A session. Finally, Fujie-san has some final remarks.
Ladies and gentlemen, thank you very much for your precious time and to attend this meeting. Today, we talked about our current business conditions and also the outlook for the future. Because of some confidentiality arrangements with customers, there were some information that we were not able to disclose. If the customer starts disclosing this information, we shall also be allowed to also put this information to the public arena. We would like to collaborate with these partners so that you can better understand how our business is progressing smoothly towards our Roadmap 2030, or ahead of making faster progress, or do we have any challenges in the achievement of the targets. In some cases in the future, we might anticipate some headwinds or some challenges.
In such case, we will discern the situation swiftly so that we can take agile actions. We are now trying to improve our execution capability. We will try to provide you with easy-to-understand explanation as much as possible. After receiving your questions and suggestions today, I learned a lot myself, I look forward to having this kind of arena for a conversation with you as much as possible as we move forward. Once again, thank you very much for this opportunity today, we look forward to your continued support and patronage. Thank you very much.
With this, we would like to finish the business briefing session for today. Thank you very much for your participation. Have a good day. Thank you. Goodbye.