Pricing Capacity-Booking Fees for Semiconductor Fabs with Outsourcing Alternatives

Abstract

A semiconductor foundry lab is a factory that manufactures integrated circuits (IC) designed by a large number of customers (called IC design houses). We consider a foundry lab that requires the customers to pay a booking fee for reserving an amount of capacity. And the capacity reserved for the customers can be either provided by the lab itself or through outsourcing capacity from other fobs. The outsourcing activity is implemented by subsequently paying booking fee at a fixed rate to the capacity-providers. This paper develops a method to determine the optimum booking price to charge design houses by the foundry lab in order to maximize the profit of the lab. The proposed capacity-booking paradigm and solution method help resolving the information distortion problem in demand forecasting.