Cost Management Mode And Its Application In IC Assembly And Test Enterprises

IC industry chain includes IC designing, IC manufacturing, IC assembly and test service, semiconductor equipment, raw material manufacturing, IC application and information service. Globally, assembly and test service generally accounts for 52% of IC industry sales volume, which means a large part of income of IC industry comes from assembly and test service. The domestic assembly, and test industry sale income yearly increased from 22.1% of year 2005 to 48.3% of year 2006, presents the tendency which accelerates to develop, enterprise quantity also rapidly grows, 110 enterprises are set up by now. But we need worry about that, according to related data, China's IC enterprises are ten times smaller than the world leading IC enterprises. "In global first 70 semiconductor enterprises, China has none". China's IC assembly and test enterprises, not only in manufacturing techniques, funds strength and manufacturing equipments, fall large behind with global leading enterprises, but also in management methods, which disparity needs more concern. For techniques can be introduced, funds can be collected, manufacturing equipments can be imported, advanced business management methods is unable to duplicate. Cost management mode as the main branch of enterprise management, becomes a hot topic in research circle. To find a kind of cost management mode which suits to China's IC assembly and test enterprises becomes a hot issue that needs be solved as soon as possible. By now, China's IC assembly and test industry cost management has many weak points, like blurred cost management goal, inaccurate cost calculation, out-of-dated cost controlling measures, cost management without key points. Through analysis and comparison research of Activities Based Costing, Cost Designing, Strategic Cost Management theory and Quality Cost Management theory, also with practical experience of applications in enterprises, the writer propose that Target Cost Management Mode suits to China's IC assembly and test enterprises. This essay will introduce Targeted Cost Management Mode in theory for its basic theory, structures, basic model, In this essay, through improving existed cost management modes and theories to establish Targeted Cost Management Mode, which aims at enhancing the wealth of share holders, calculating cost by activities, controlling cost by target cost and with quality cost management as the key point of cost management work, to realize the strategic development of the enterprises.Then the writer chose an assembly and test services enterprise in China's IC industry to design an application program. Firstly, S company should change cost management target to enhance the wealth of share holders. Secondly, based on activities, cost calculation will be accurate, to improve the usefulness of cost information. Thirdly, use target cost which is accepted by the market to control the product cost. Then, use the Constraints Theory as a guide to find the process which constrains the enterprise to realize the targets. Solving this bottle neck process, the operation of whole process will get a more fruitful change. At last, introduce Targeted Cost Management Mode in other manufacturing enterprises.