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An Economic Theory of Process Technology Migration for Technology Adoption–The Semiconductor Microchip Case
Date Issued
2010
Date
2010
Author(s)
Fan, Chin-Pei
Abstract
Technological progress usually makes a great impact on high-tech industry. Semiconductor industry is faced with rapid technology progress and short product lifecycle. However, since design cost and manufacturing cost increase substantially, process technology advancement rate decreases. Firms used to adopt the newest technology, but now node-skipping strategy becomes one of semiconductor firms’ best competitive strategy.
This research uses Capacity Productivity index to measure the gap between main process technology and advanced process technology. Then, we develop a dynamic system of production cost which includes design cost, manufacturing system cost and economies of scale. Moreover, we construct an average wafer cost function for different technology process, and use it to assist firms in adopting technology.
Finally, we develop a technology adoption model by using dynamic programming method. The results show that when the revenue growth rate of technology advancement increases, firms intend to adopt advanced technology process. Besides, this research proves that the substantial increase of design cost and manufacturing cost are the key factors to make firms adopt node-skipping strategy. If the design cost increase more substantial, economies of scale will be more conspicuous. In order to acquire higher revenue, firms adopt the low price strategy to attract more demands. As a result, firms which have older technology process want to adopt node-skipping strategy.
This research uses Capacity Productivity index to measure the gap between main process technology and advanced process technology. Then, we develop a dynamic system of production cost which includes design cost, manufacturing system cost and economies of scale. Moreover, we construct an average wafer cost function for different technology process, and use it to assist firms in adopting technology.
Finally, we develop a technology adoption model by using dynamic programming method. The results show that when the revenue growth rate of technology advancement increases, firms intend to adopt advanced technology process. Besides, this research proves that the substantial increase of design cost and manufacturing cost are the key factors to make firms adopt node-skipping strategy. If the design cost increase more substantial, economies of scale will be more conspicuous. In order to acquire higher revenue, firms adopt the low price strategy to attract more demands. As a result, firms which have older technology process want to adopt node-skipping strategy.
Subjects
Technology node skipping
Dynamic programming
Technology migration
Technology adoption
Dynamic system
Product lifecycle
Type
thesis
File(s)
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Name
ntu-99-R97546028-1.pdf
Size
23.53 KB
Format
Adobe PDF
Checksum
(MD5):f05c22b39be0ec824459aea69fe4711b