The semiconductor manufacturing strategies

In this paper, the author employ an n-firm Stackelberg competition model to form a three-stage manufacturing game. A comparison is then-made-between this variant of the Stackelberg model and Cournot. A first mover advantage in DRAM production is the result and there is thus a financial advantage to becoming the leader. Furthermore, it is a strategy for DRAM manufacturers to commit more capacity in order to deter further entrants. Such behavior may also explain the volatility and the common over-capacity problem in the DRAM market.