CASE STUDY-A Proposed Capital Investment to Improve Process Yield Many engineering projects aim at improving facility utiization and process yields. Tis case study lustrates an engineeing economy analysis related to the redesign of a major component in the manulacture of semiconductors. Semiconductor manufacturing involves taking a flat disc of silicon caled a wafer, and depositing many layers of material on top of it. Each layer has a pattern on t hat, upon completion, defines the electrical crouits of the finished microprocessor. Each 8-inch wafer has up to 100 microprocessors on t However, the typical average yield of the production line is 75% good microprocessors per water At one local company, the process engineers responsible for the chemical vapor deposition (CVD) tool e. process equipment) that deposits one of the many layers have an idea for improving overall yield. They propose to improve this tool's vacuum with a redesign of one of its major components. The engineers believe the project will result ia 2% ncrease in the average This company has only one CVD tool, and it can process 10 wafers per hour. The process engineers have determined that the CVD tool has an average utilization rate (Le, "time running) of 80%. A water costs $5,000 to manufacture. and a good microprocessor can be sold for $100 These semiconductor fabrication plants (abs') operate 168 hours per week, and all good microprocessors The capital investment required for the project is $250,000, and maintenance and support expenses are expected to be $25,000 per month. The Idetime of the modfied tool wil be five years, and the company uses a 12% MARR per year (compounded monthly) as its-hunde rate Before implementing the proposed questions to you (hired as an independent consultant) to evaluate the menits of the proposal: d) (a) Based on the PW (or PV or P) method, should the project be approved? e) If the achievable improvement in production yield has been overestimated by the process engineers, at whatl percent yield improvement would the project breakeven? n Develop payback period based on discounted cash flows. (explain its significance) g) Using benefit cost ratio what recommendations do you have? (explain its significance) h) What is the IRR, protability index and retum on nvestment for the project? (explain Prepare case study report following case study report writing guide lines (Refer to Syllabus). CASE STUDY-A Proposed Capital Investment to Improve Process Yield Many engineering projects aim at improving facility utiization and process yields. Tis case study lustrates an engineeing economy analysis related to the redesign of a major component in the manulacture of semiconductors. Semiconductor manufacturing involves taking a flat disc of silicon caled a wafer, and depositing many layers of material on top of it. Each layer has a pattern on t hat, upon completion, defines the electrical crouits of the finished microprocessor. Each 8-inch wafer has up to 100 microprocessors on t However, the typical average yield of the production line is 75% good microprocessors per water At one local company, the process engineers responsible for the chemical vapor deposition (CVD) tool e. process equipment) that deposits one of the many layers have an idea for improving overall yield. They propose to improve this tool's vacuum with a redesign of one of its major components. The engineers believe the project will result ia 2% ncrease in the average This company has only one CVD tool, and it can process 10 wafers per hour. The process engineers have determined that the CVD tool has an average utilization rate (Le, "time running) of 80%. A water costs $5,000 to manufacture. and a good microprocessor can be sold for $100 These semiconductor fabrication plants (abs') operate 168 hours per week, and all good microprocessors The capital investment required for the project is $250,000, and maintenance and support expenses are expected to be $25,000 per month. The Idetime of the modfied tool wil be five years, and the company uses a 12% MARR per year (compounded monthly) as its-hunde rate Before implementing the proposed questions to you (hired as an independent consultant) to evaluate the menits of the proposal: d) (a) Based on the PW (or PV or P) method, should the project be approved? e) If the achievable improvement in production yield has been overestimated by the process engineers, at whatl percent yield improvement would the project breakeven? n Develop payback period based on discounted cash flows. (explain its significance) g) Using benefit cost ratio what recommendations do you have? (explain its significance) h) What is the IRR, protability index and retum on nvestment for the project? (explain Prepare case study report following case study report writing guide lines (Refer to Syllabus)
