Semiconductor Company Purchasing Cost Control Research

The sales of global semiconductor industry is having sudden decrease in year 2011. This leads to high inventory in IC manufacturers. IC manufacturers are facing idle production capability, supplier price increase and human resource cost increase issues at the same time, IC manufacturers'cost is going up, while the end customers are paying less to IC. IC manufacturers'profit is squeezed out. To maintain and get better profit, IC manufacturers have to control purchasing cost effectively.This essay is trying to study the cost impacting elements to semiconductor industry by taking A Semiconductor Company's purchasing cost control as a sample. The study analyzed the problems in A Semiconductor Company's purchasing cost control process by focusing on internal control and external control aspects. The main issues in internal control are the inadequate Purchasing Process, inadequate communication between different departments, Purchasing control information system is not sound, Purchasing Order System is not connected with supplier invoice systems; The main issues in external control are that strategic partner relationships are not set up with key suppliers, supplier evaluation and stimulation process are not available.The essay proposes to apply full employee participation principle, key projects exception principle and total cost principle in confronting the competition from suppliers, customers, new competitors & existing competitors and substitute commodities. The essay suggests possible solution to the above issues and estimates purchasing cost reduction amount provides that these solutions are applied.Purchasing cost control should be based on company actual situation and A Semiconductor Company's marketing position. Semiconductor company is facing fierce competition. A Semiconductor Company has to continuously adjust their purchasing control method to better control the cost.