Akamon Management Review
Online ISSN : 1347-4448
Print ISSN : 1348-5504
ISSN-L : 1347-4448
Volume 14 , Issue 10
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  • Production System Construction and Process Technology Development
    Chikashi Kishimoto
    2015 Volume 14 Issue 10 Pages 527-600
    Published: October 25, 2015
    Released: October 25, 2016

    The purpose of this study is to examine the technological capability of Taiwanese semiconductor foundry makers (mainly, TSMC, partly, UMC). To put it concretely, I will investigate at length (1) the construction of flexible and efficient production system and (2) the development of process technology by foundry makers, through making full use of author’s interview records and primary sources including “Company Annual Report.” According to existing studies, the reason why Taiwanese foundry makers (especially, TSMC) succeeded in technological catch-up with advanced companies in 1990s is mainly because they aggressively introduced the latest model of manufacturing machines of high yield and efficiency. Many improvement and integration skills were embodied in these newest model of machines, therefore, latecomers could enjoy the technological progress only by purchasing them. It is also pointed out that their investment in these expensive machines was substantially supported by Taiwan government’s preferential treatment. This explanation of the rise of Asian latecomers is persuasive, but insufficient. This study tries to show that the sustainable growth of Taiwanese foundry makers (especially, TSMC) is not only due to the aggressive introduction of new-model machines, but also due to their own considerable efforts to upgrade their technological capability. For example, in the field of production technology, they have tried to promote high-variety low-volume manufacturing through “the platform strategy”, plant automatization and ICT control system, daily improvement, in-house standardization of machines/tools/recipes and knowledge sharing of know-how and experiences, rapid start-up of mass-production lines through the close collaboration between research & development section and factory, and so on. In the field of process technology development, their efforts include successive development of a next generation process technology in every one to three years, enrichment of special process technologies (besides CMOS logic process) for system LSI, recent undertaking of packaging/assembly service, promotion of advanced transistor research, and so on. It is also clarified that these efforts have been promoted following technological trends in order to offer demanding clients comprehensive solutions as a manufacturing service provider holding stick to the pure-play foundry business model. For the analysis of technological capability, I will offer a framework, which is constructed consulting “Capability Building Race” (Fujimoto, 2003) and modifying it. That is to say, I will examine technological capability through dividing it into two layers: (a) “the surface superiority” (namely, phenomena reflecting the excellence in productivity/quality/cost management, technology development, and operation) and (b) “the foundation of superiority” (namely, practices and mechanisms in the background of the surface superiority, in addition, business strategy and business model affecting it).

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