A Profitability Management System for Semiconductor Business

DOI NDL Digital Collections Web Site
  • Mita Hiroyuki
    Chuo Coopers & Lybrand Consulting, Managing Associates:Newport University

Bibliographic Information

Other Title
  • 半導体ビジネスの収益構造と採算管理システム―DRAMなどの半導体汎用製品を中心として―
  • ハンドウタイ ビジネス ノ シュウエキ コウゾウ ト サイサン カンリ システム DRAM ナド ノ ハンドウタイ ハンヨウ セイヒン オ チュウシン ト シテ

Search this article

Description

<p>Many executives in the semiconductor business frequently question whether traditional product costing information is useful for product strategy formulation, particularly in deciding “real profitability” of the products. Semiconductor product cost (full cost) would dynamically decline when a synergy effect of the two unique factors is expected; huge potential demand with high price elasticity, and micro process manufacturing technology that would reduce the chip size. Therefore, no matter how precisely the product cost is calculated, it would not be relevant to deciding the product strategy and a future profitability of the product. From a product strategy point of view, it is very important to understand the dynamics of product profitability structures and, therefore, establish management systems which provide such information. This paper first reveals the mechanisms of how semiconductor product cost would dramatically decline with its unique characteristics. Then discussion turns toward the development of a profitability management system which supports formulation of product strategy by understanding the behavior of short-term and long-term profitability structures. The new system provides strategic decision support information including estimated changes in product costs and optimized price setting for each strategy alternative, product mix that will maximize long-term profit, and economies of the new product line investment.</p>

Journal

Keywords

Details 詳細情報について

Report a problem

Back to top