Performance Evaluation of the Semiconductor Industry Based on a Metafrontier Approach

Abstract

Abstract. The semiconductor industry has been regarded as one of the most important industries by Taiwan due to the market share of Taiwan's semiconductor industry in 2011 ranked second worldwide. However, the European debt crisis triggered a global economic recession in 2011, causing Taiwan's output of semiconductors in 2010 and 2011 to show negative growth. This paper will mainly explore, from the performance evaluation perspective, the Malmquist productivity index of the Taiwan's semiconductor industry based on a metafrontier approach. The empirical results show that the European debt crisis in 2011 had an impact on Integrated circuit (IC) design companies and IC manufacturing companies, but that there was no influence on IC packaging and testing companies when measuring static efficiency. From the viewpoint of dynamic productivity performance, the paper finds that the main reason for the negative growth of IC packaging and testing companies and IC design companies came from a backward movement in technical change, but the main reason for the negative growth of IC manufacturing companies derived from a decline in pure technical efficiency.

Applying Data Envelopment Analysis to Evaluate the Operation Performance of Taiwan’s TFT-LCD Industry After Post-Global Financial Crisis: A Longitudinal Study

“…(2) Based on the analysis result of operation performance of enterprises during different periods using productivity index, mean total factor productivity change declined within the range of (0.873, 0.996), which indicates material impact of the financial crisis. This result is consistent with the research result of Chiu et al [3]. Mean total factor productivity change greatly increased within the range of (1.098, 1.145) during the period between 2011 and 2012, but further declined within the range of (0.660, 0.725) during the period between 2013 and 2015, and further increased within the range of (1.313, 1.529) during the period between 2016 and 2017.…”

“…This result is consistent with the research result of the reference [15]. Further, prior studies, including Lee and Pai [2], Wang et al [15], and Chiu et al [3], argue that more R&D inputs will 12 facilitate growth of enterprises and will have deferred effects on their future performance [7]. However, this study found insignificant relation between R&D expense and operation performance.…”

“…DEA is widely applied in domestic and foreign literature for analyzing operation performance and efficiency, as summarized in the following, Lee and Pai [2] [3] recommended major companies keeping increasing capital expenditure in the context of economic downturn, in order to keep increasing its edge over competitors and become more competitive when the economy recovers.…”

“…Employees are regarded as the assets of an enterprise that will create added values in the future and are developed in an effort to fully exploit their potential [3,16]. An input of a greater number of employees represents more sufficient human resource capital of the enterprise, and therefore more profits will be created for the company.…”

“…Taiwan's TFT-LCD producers, after being through industrial environment changes, proactively adjust their productivities or change their business strategies [2]. However, market demand still remains weak [3]. Competing against Chinese and South Korean producers, Taiwan producers are under increasing pressure, which in turn affects their profit performance.…”