On an IC wire bonding machine production–inventory problem with time value of money

The semiconductor industry in Taiwan has received excellent performance ratings in the past. SinoPac’s statistics in January, 2016 found that two of the top four global packaging and testing companies are from Taiwan, including ASE Group and SPIL. In the IC packaging process, the wire bonding machine requires careful attention. It is also costly at approximately 50% of the equipment investment. Thus, this paper focuses on wire bonding machines’ production problems. According to the on-site interviews, three key control modules are identified, which may change a machine to an out-of-control state and are responsible for 90% of the defective products. A mathematical model is developed to determine the optimal production time of an imperfect production process. Taking the time value of money, the objective is to minimise the total of the set-up cost, inventory cost and the defect cost. Besides applying MacLaurin Series, a math property and an effective solution range are derived to help obtain near-optimal solutions. For the justification of solution quality, the bisection method working on practical data is used. Finally, managerial insights are explored from observed outputs through the changes of various parameters. Moreover, these explorations are confirmed by experts in this field.