Business architecture and dynamics of interdependences analyzed by design structure matrix: Comparing liquid crystal display and semiconductor industries

Liquid crystal displays (LCDs) and semiconductor devices, such as large scale integrated (LSI) circuits, are key devices supporting the information society and are becoming more complex. Baldwin et al. emphasized the power of modularity using the design structure matrix (DSM) with regards to complexity. There is no research on interdependences among companies by using the DSM; therefore, I conducted such research. Companies in the LCD industry want to produce larger LCD panels than each other by using customized equipments. According to the analysis by the DSM, the higher the interdependences among the companies, the higher the degree of integral business architecture of the industry. In contrast, the LSI industry uses a standard silicon wafer size as a “design rule”, which reduces the interdependences as shown by the DSM analysis results. Therefore, the lower the interdependences among the companies, the higher the degree of modular business architecture of the industry. In addition, the dynamics of the interdependences was analyzed. The results showed that by following a process from planning to operation, the interdependences in an industry with integral business architecture are reduced. By DSM analysis, I found the business architecture and dynamics of interdependences in the LCD and LSI industries.