In this paper, we advance the state of the art for capacity allocation and scheduling models in a semiconductor manufacturing front-end fab (SMFF). In SMFF, a photolithography process is typically considered as a bottleneck resource. Since SMFF operational planning is highly complex (re-entrant flows, high number of jobs, etc.), there is only limited research on assignment and scheduling models and their effectiveness in a photolitography toolset. We address this gap by: (1) proposing a new mixed integer linear programming (MILP) model for capacity allocation problem in a photolithography area (CAPPA) with maximum machine loads minimized, subject to machine process capability, machine dedication and maximum reticles sharing constraints, (2) solving the model using CPLEX and proofing its complexity, and (3) presenting an improved genetic algorithm (GA) named improved reference group GA (IRGGA) biased to solve CAPPA efficiently by improving the generation of the initial population. We further provide different experiments using real data sets extracted from a Bosch fab in Germany to analyze both proposed algorithm efficiency and solution sensitivity against changes in different conditional parameters.