New business models for standard and ASIC products in the semiconductor industry-competing on cost and time-to-market

Abstract

Many semiconductor companies in the ASIC business struggle with the new competitive environment, which requires better and better operational performance. We detail ways of improving their current business model in order to become more responsive to customer orders and more profitable at the same time. Based on a study of customer order change behaviour, we motivate why these companies should base their business and operations on unit volume and not on the degree of standardization of their products. Furthermore, we suggest new contract schemes and introduce the concept of delayed product differentiation.