Strategic Capacity Planning for the Semiconductor Industry: Current Industrial Practice and New Directions

Wednesday, September 25, 2002 - 11:00am - 11:50am
Keller 3-180
Robin Roundy (Cornell University)
Joint work with Metin Cakanyldirim, and Woonghee Tim Huh.

Semiconductor manufacturing is one of the world's leading industries. Capacity planning decisions are crucial and challenging. A modern fab costs $1.5-2 billion. About 65% of that is for machine tools. The semiconductor industry is increasingly effected by short and shrinking product life cycles, by fierce competition, by unpredictable and volatile markets, and by rapid changes in technology. Yet this industry relies on machine tools that have very long procurement lead times and are extremely expensive.

We will present an overview of a long-range research effort designed to provide the semiconductor industry with useful tools for optimizing capacity plans in a stochastic environment. We will review current business practices in strategic capacity planning in the semiconductor industry, and will discuss model-based evaluations of some of those practices. We will present new methods for statistically modeling and quantifying the errors in demand forecasts. We will present a novel approach for modeling demand for multi-dimensional capacity planning problems, and discuss the practical and algorithmic implications of different ways of modeling stockouts. We present efficient algorithms for provably solvable versions of the strategic capacity planning problems, and summarize the current status of research on versions that are not provably solvable.