Capital Productivity

Productivity is defined here as a measure of output per unit of input. Capital productivity is defined as reveune per dollar of property, plant, and equipment (PPE). This ratio can be expressed as the product of its two components, process productivity and equipment productivity:

Equipment Productivity

Equipment productivity - P(E) - is the productivity of PPE. It is measured in square inches of silicon per dollar of PPE. Equipment productivity can be divided into three factors: reliability, utilization, and throughput. For instance:

Reliability

Equipment reliability is measured by four parameters in the following formula:

For example, if MTBF = 1,000 hours, MTTR - 4 hours, MTBA - 8 hours, and MTTA = 10 minutes, then R = 97.5%.

Utilization

Utilization refers to the use of equipment once it is available for use. The average equipment utilization for North American semiconductor companies is about 50%. In other words, equipment sits idle about half the time. This is primarily a function of inefficiencies in the production process caused by having to plan large mixes of products with many process steps for many different customers.

Throughput

Wafer throughput, the equipment's wafer-handling capacity, is measured in square inches of silicon per year per dollar of PPE. Silicon is used to measure throughput for the following reasons:

Silicon is the raw material used and processed in wafer fabs. Square inches of silicon is easily measurable. Good die per square inch is a good indicator of yield.
Square inches of silicon is a more basic measuring unity than wafer starts, which aggregates variable-sized wafers.

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