An Analysis of Managing Sustainable Competitiveness for Semiconductor Manufacturers

Innovative capability is considered inevitable for firms to sustain their competitiveness. In the recent rapidly changing global competition environment, the traditional integrated device manufacturer (IDM) model in semiconductor industry is facing the limitation of sustaining its profitability and competitiveness. IDM’s focusing both chip design and manufacturing for various application segments disperse its resources of innovating sustainable competiveness. This study develops an analysis framework with incorporating data envelopment analysis (DEA) approach to measure the efficiency through proper input and output variables setting. This framework aims at providing guidelines for developing firm’s business and technology strategies. We conducted a DEA analysis by collecting financial data from twenty-six leading semiconductor manufacturing companies, including twenty IDMs and six foundries. The results reveal that the foundry companies have higher competitive efficiency than those of IDMs. The empirical analysis suggests that adopting the asset-light business model may provide IDMs a better resource allocation and help the increase of relative efficiency scores.