Case | HBS Case Collection | March 2011

Semiconductor Manufacturing International Company in 2011

by Willy Shih and Jia Cheng

Abstract

When David Wang took over as the CEO of SMIC, he knew that if he was to capitalize on the company's strategic location in the China market, he would have to transform the company mindset and its operating structure from its roots in the manufacturing of DRAMs to the service orientation that was necessary to support the customer promise of being a foundry. This meant transforming from a high volume continuous flow manufacturer of commodities chips to a job shop structure that focused on custom manufacturing services. This entailed more than rearranging the manufacturing lines, it meant a dramatic shift in the company culture. Wang also had to ensure the firm's ability to offer the most advanced process technologies. Having fallen behind in previous generations, his predecessor had chosen to license process technology from IBM. Now he faced the question of whether his rapidly changing and maturing organization had the ability to go it alone on future process technology development, or whether it still had to depend on IBM, at least for the time being.

Keywords: Growth and Development Strategy; Resource Allocation; Market Entry and Exit; Business Processes; Organizational Change and Adaptation; Organizational Culture; Customization and Personalization; Semiconductor Industry; China;

Citation:

Shih, Willy, and Jia Cheng. "Semiconductor Manufacturing International Company in 2011." Harvard Business School Case 611-053, March 2011.