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Noise and Learning in Semiconductor Manufacturing

Author

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  • Roger E. Bohn

    (School of International Relations and Pacific Studies, University of California, San Diego, La Jolla, California 92093-0519)

Abstract

Rapid technological learning is critical to commercial success in VLSI semiconductor manufacturing. This learning is done through deliberate activities, especially various types of experimentation. Such experiments are vulnerable to confounding by process noise, caused by process variability. Therefore plants with low noise levels can potentially learn more effectively than high noise plants. Detailed die yield data from five semiconductor plants were examined to estimate process noise levels. A bootstrap simulation was used to estimate the error rates of identical controlled experiments conducted in each plant. Absolute noise levels were high for all but the best plants, leading to lost learning. For example, the probability of overlooking a three percent yield improvement was above twenty percent in all but one plant. Brute-force statistical methods are either expensive or ineffective for dealing with these high noise levels. Depending on the criterion used, there was a four- to ten-fold difference among the plants.

Suggested Citation

  • Roger E. Bohn, 1995. "Noise and Learning in Semiconductor Manufacturing," Management Science, INFORMS, vol. 41(1), pages 31-42, January.
    • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:1:p:31-42
    DOI: 10.1287/mnsc.41.1.31
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    Cited by:

    1. Mathews, John A. & Cho, Dong-Sung, 1999. "Combinative capabilities and organizational learning in latecomer firms: the case of the Korean semiconductor industry," Journal of World Business, Elsevier, vol. 34(2), pages 139-156, July.
    2. Frances X. Frei & Ravi Kalakota & Leslie M. Marx, 1997. "Process Variation as a Determinant of Service Quality and Bank Performance: Evidence from the Retail Banking Study," Center for Financial Institutions Working Papers 97-36, Wharton School Center for Financial Institutions, University of Pennsylvania.
    3. David Besanko & Ulrich Doraszelski & Yaroslav Kryukov & Mark Satterthwaite, 2008. "Learning-by-Doing, Organizational Forgetting, and Industry Dynamics," GSIA Working Papers 2009-E22, Carnegie Mellon University, Tepper School of Business.
    4. Scott F. Rockart & Kristin Wilson, 2019. "Learning in Cycles," Organization Science, INFORMS, vol. 30(1), pages 70-87, February.
    5. Donald E. Harter & Mayuram S. Krishnan & Sandra A. Slaughter, 2000. "Effects of Process Maturity on Quality, Cycle Time, and Effort in Software Product Development," Management Science, INFORMS, vol. 46(4), pages 451-466, April.
    6. Stefan H. Thomke, 1998. "Managing Experimentation in the Design of New Products," Management Science, INFORMS, vol. 44(6), pages 743-762, June.
    7. Bonnín Roca, Jaime & Vaishnav, Parth & Morgan, Granger M. & Fuchs, Erica & Mendonça, Joana, 2021. "Technology Forgiveness: Why emerging technologies differ in their resilience to institutional instability," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    8. David Besanko & Ulrich Doraszelski, 2005. "Learning-by-Doing, Organizational Forgetting, and Industry Dynanmics," Computing in Economics and Finance 2005 236, Society for Computational Economics.
    9. Niemi, Petri & Huiskonen, Janne & Kärkkäinen, Hannu, 2009. "Understanding the knowledge accumulation process--Implications for the adoption of inventory management techniques," International Journal of Production Economics, Elsevier, vol. 118(1), pages 160-167, March.
    10. Christoph H. Loch & Kishore Sengupta & M. Ghufran Ahmad, 2013. "The Microevolution of Routines: How Problem Solving and Social Preferences Interact," Organization Science, INFORMS, vol. 24(1), pages 99-115, February.
    11. Christoph H. Loch & Christian Terwiesch & Stefan Thomke, 2001. "Parallel and Sequential Testing of Design Alternatives," Management Science, INFORMS, vol. 47(5), pages 663-678, May.
    12. Pablo Casas‐Arce & Sofia M. Lourenço & F. Asís Martínez‐Jerez, 2017. "The Performance Effect of Feedback Frequency and Detail: Evidence from a Field Experiment in Customer Satisfaction," Journal of Accounting Research, Wiley Blackwell, vol. 55(5), pages 1051-1088, December.
    13. Charles M. Weber & Rainer P. Hasenauer & Nitin V. Mayande, 2018. "Toward a Pragmatic Theory for Managing Nescience," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(05), pages 1-26, October.
    14. David Besanko & Ulrich Doraszelski & Yaroslav Kryukov & Mark Satterthwaite, 2007. "Learning-by-Doing, Organizational Forgetting, and Industry Dynamics," Levine's Bibliography 321307000000000903, UCLA Department of Economics.
    15. Frances X. Frei & Ravi Kalakota & Andrew J. Leone & Leslie M. Marx, 1999. "Process Variation as a Determinant of Bank Performance: Evidence from the Retail Banking Study," Management Science, INFORMS, vol. 45(9), pages 1210-1220, September.
    16. David Maslach & Oana Branzei & Claus Rerup & Mark J. Zbaracki, 2018. "Noise as Signal in Learning from Rare Events," Organization Science, INFORMS, vol. 29(2), pages 225-246, April.
    17. Linda Argote & Ella Miron-Spektor, 2011. "Organizational Learning: From Experience to Knowledge," Organization Science, INFORMS, vol. 22(5), pages 1123-1137, October.
    18. Thomke, Stefan H., 1998. "Simulation, learning and R&D performance: Evidence from automotive development," Research Policy, Elsevier, vol. 27(1), pages 55-74, May.
    19. Bonnín Roca, Jaime & Vaishnav, Parth & Morgan, M.Granger & Mendonça, Joana & Fuchs, Erica, 2017. "When risks cannot be seen: Regulating uncertainty in emerging technologies," Research Policy, Elsevier, vol. 46(7), pages 1215-1233.
    20. Kumar Rajaram & Charles J. Corbett, 2002. "Achieving Environmental and Productivity Improvements Through Model-Based Process Redesign," Operations Research, INFORMS, vol. 50(5), pages 751-763, October.
    21. Michael A. Lapré & Candace Cravey, 2022. "When Success Is Rare and Competitive: Learning from Others’ Success and My Failure at the Speed of Formula One," Management Science, INFORMS, vol. 68(12), pages 8741-8756, December.
    22. Arda Yenipazarli, 2015. "A road map to new product success: warranty, advertisement and price," Annals of Operations Research, Springer, vol. 226(1), pages 669-694, March.

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