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.
Highlights
Using the elements of the Malmquist productivity index (MMPI) to explore the time trend of productivity changes, we found that the technical change (TCm) in integrated circuit (IC) design companies and IC packaging and testing companies was the main reason for the negative growth of the MMPI, meaning that, as time went by during the research period, technical change decreased
The empirical data used in this study were gathered from 111 semiconductor manufacturers that were listed on the stock market and the over-the-counter market in Taiwan from 2009 to 2011
The IC manufacturing companies underperformed from 2009 to 2011 against the IC design companies and IC packaging and testing companies when the metafrontier was regarded as the evaluation basis
Summary
Halkos and Tzeremes (2007) point out that the semiconductor industry is crucial to the world, and that the characteristic advantages of this industry are that it is capital intensive, it is technology intensive, it is oriented towards technological integration, and it has a wide. This was the worst recession for this industry since the subprime mortgage bubble burst in 2007 Analysing this issue from the perspective of industry sectors, we found that there was negative growth in IC design output value in 2011 compared with 2010 and that the output value of IC manufacturing and packaging and testing declined (both decreased by about 10% to 15%). This study used the metafrontier Malmquist productivity index (MMPI) proposed by O’Donnell et al (2008) to explore the performance evaluation of Taiwan’s semiconductor industry from 2009 to 2011, regarding manufacturers of different production technologies within the semiconductor industry as different groups and discussing group frontier efficiency, metafrontier efficiency, technology gap analysis and the MMPI between three manufacturing groups: IC design, IC manufacturing, and IC packaging and testing. This study adopts the directional distance function, to take into consideration the fact that outputs are proportionately expanded and that inputs are proportionately reduced, to evaluate semiconductor industry performance
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