Tactical capacity planning for semiconductor manufacturing: MILP models and scalable distributed parallel algorithms

A multiperiod stochastic mixed-integer linear programming model is developed to address the tactical capacity planning of semiconductor manufacturing with considerations of complex routing of material flows, in-process inventory, demand and capacity variability, multisite production, capacity utilization rate, and downside risk management. Both planning level decisions (i.e., capacity allocation and customer service level decisions) as well as operational level decisions (i.e., production, inventory, and shipment decisions) can be simultaneously determined based on the two proposed multiobjective optimization models. To address the huge number of scenarios needed to characterize the uncertainty and the large number of first-stage integer variables in industrial scale applications, two novel scalable distributed parallel optimization algorithms are developed to mitigate the computational burden. The proposed mathematical models and algorithms are illustrated through two case studies from a major US semiconductor manufacturer. Results from these case studies provide key decision support for capacity expansion in semiconductor industry. (c) 2016 American Institute of Chemical Engineers AIChE J, 62: 3930-3946, 2016