Capacity Preparation Mechanism In Semi-conductor Supply Chain Under Asymmetric Demand Forecast Information

This paper made a research on capacity preparation issue in the semi-conductor industry from the perspective of mechanism design. By making comparison about the best quantity of capacity reservation needed between asymmetry demand forecast information and symmetry demand forecast information employed in a general trading pattern of distributed semi-conductor supply chain, a fact that the former shall lower the efficiency of the supply chain. Also comparison about the best quantity of capacity preparative in between semi-conductor supply chain under vertical integration condition and distributed semi-conductor supply chain was made to find that distributed semiconductor become inefficiency, double marginalization is another factor which leads to the low efficiency. So information sharing mechanism is required to solve the problem of information asymmetry and channel coordination mechanism to reduce the impact of double marginalization. According to the price parameter in the capacity preparation mechanism, it can be further divided into three sub-mechanism. a) Compensation to semi-conductor distributor when the actual demand is less than the volume of reservations. b) No compensation no matter whether the actual demand is less than reservation or the quantity of capacity preparative is more than the actual demand. c) Compensation to semi-conductor manufacturer when the quantity of capacity preparative is more than the actual demand. Separating equilibrium conditions for signaling model and the best quantity of capacity preparative for semi-conductor manufacturer and the best quantity of capacity reservation for the semi-conductor distributor in each mechanism were found in this paper. This paper also proves that the three mechanisms are compatible, all of them achieving the goal of sharing information. And if the parameters satisfy some conditions, the best quantity of capacity preparative needed in mechanism of Compensation to semi-conductor manufacturer when the quantity of capacity preparative is more than the actual demand is the same with the quantity in the supply chain under vertical integration condition.By comparing the most favorite policies for semi-conductor manufactor and distributor in three different mechanisms, found that , although they all can achive the goal of information sharing, the optimal quantity of capacity preparative of semi-conductor distribution is different in each mechanism in order to signal the same demand forcast information, and the optiamal quantity of capactity preparative of semi-conductor manufactor also is different in different mechanisms reflecting to the same reservation. Identify that the cost of signaling for each mechanism is quite different. The lower the cost is , the more effective the mechanism. By experiments and simulation, I find that compensation to semi-conductor manufator when the actual demand is less than the volume of reservations is the best policy. And compensation to semi-conductor distributor when the quantity of capacity preparative is more than the actual demand is the worst. In conclusion, the more a mechanism can weaken the barriers which lows the supply chain efficiency, the lower the signaling cost needed to achieve the goal by the mechanism and the more effective of this mechanism.