Fabless Semiconductor Firms’ Financial Performance Determinant Factors: Product Platform Efficiency and Technological Capability

Jun Hong Park, Sang Ho Kook, Hyeonu Im, Soomin Eum and Chulung Lee
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Jun Hong Park: Graduate School of Management of Technology, Korea University, 145, Anam-ro, Seongbuk-gu, Seoul 02841, Korea
Sang Ho Kook: Korea Electronics Technology Institute, 25, Saenari-ro, Bundang-gu, Seongnam-si 13509, Korea
Hyeonu Im: Department of Industrial Management Engineering, Korea University, 145, Anam-ro, Seongbuk-gu, Seoul 02841, Korea
Soomin Eum: Department of Industrial Management Engineering, Korea University, 145, Anam-ro, Seongbuk-gu, Seoul 02841, Korea
Chulung Lee: Division of Industrial Management Engineering, Korea University, 145, Anam-ro, Seongbuk-gu, Seoul 02841, Korea

Sustainability, 2018, vol. 10, issue 10, 1-22

Abstract: The semiconductor industry is experiencing a rapid change since new markets and new technologies have emerged to give insights to product innovation. The semiconductor industry is now specializing into the integrated device manufacturer (IDM), fabless, and foundry sectors. We investigated the determinant factors that affect the financial performance of firms in the fabless sector, which is the most technology-intensive and product-oriented sector among the three sectors. The correlation among technological capability, product platform, and financial performance is analyzed by structural equation modeling. The data includes 17,256 patents from 2005 to 2014 and financial data from 2012 to 2016 from 57 firms that run businesses in the fabless sector. Specifically, technological capability includes technological assets, technology breadth, and technology depth. New product development occurs by applying product platform efficiency. Financial performance includes growth and profitability. The results show that advancing product platform efficiency brings positive effects to financial performance. Also, increasing technological depth and technological assets not only improve product platform efficiency, but also bring positive effects to financial performance. In addition, technological depth affected growth positively, and technological breadth affected profitability positively. The results show the direction that new product development strategy needs to take.

Keywords: product platform efficiency; technological capability; technological assets; technology breadth; technology depth; fabless semiconductor firm (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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