Fabless semiconductor firms' financial performance determinant factors: Product platform efficiency and technological capability

Jun Hong Park, Sang Ho Kook, Hyeonu Im, Soomin Eum, Chul Ung Lee

Research output: Contribution to journalArticle

Abstract

The semiconductor industry is experiencing a rapid change since new markets and new technologies have emerged to give insights to product innovation. The semiconductor industry is now specializing into the integrated device manufacturer (IDM), fabless, and foundry sectors. We investigated the determinant factors that affect the financial performance of firms in the fabless sector, which is the most technology-intensive and product-oriented sector among the three sectors. The correlation among technological capability, product platform, and financial performance is analyzed by structural equation modeling. The data includes 17,256 patents from 2005 to 2014 and financial data from 2012 to 2016 from 57 firms that run businesses in the fabless sector. Specifically, technological capability includes technological assets, technology breadth, and technology depth. New product development occurs by applying product platform efficiency. Financial performance includes growth and profitability. The results show that advancing product platform efficiency brings positive effects to financial performance. Also, increasing technological depth and technological assets not only improve product platform efficiency, but also bring positive effects to financial performance. In addition, technological depth affected growth positively, and technological breadth affected profitability positively. The results show the direction that new product development strategy needs to take.

Original languageEnglish
Article number3373
JournalSustainability (Switzerland)
Volume10
Issue number10
DOIs
Publication statusPublished - 2018 Sep 20

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determinants
Semiconductor materials
firm
efficiency
Product development
semiconductor industry
performance
Profitability
product development
profitability
Industry
Foundries
Byproducts
assets
Innovation
development strategy
iron and steel industry
semiconductor
product
industry

Keywords

  • Fabless semiconductor firm
  • Product platform efficiency
  • Technological assets
  • Technological capability
  • Technology breadth
  • Technology depth

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

Cite this

Fabless semiconductor firms' financial performance determinant factors : Product platform efficiency and technological capability. / Park, Jun Hong; Kook, Sang Ho; Im, Hyeonu; Eum, Soomin; Lee, Chul Ung.

In: Sustainability (Switzerland), Vol. 10, No. 10, 3373, 20.09.2018.

Research output: Contribution to journalArticle

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