capacity planning

**Capacity planning** is the **process of determining required manufacturing capability to meet future demand within target service and cost constraints** - it guides capital investment, staffing, and equipment deployment decisions. **What Is Capacity planning?** - **Definition**: Forecast-driven analysis of required tool hours, workforce, and infrastructure by planning horizon. - **Planning Inputs**: Demand scenarios, process times, yield assumptions, uptime, and cycle-time targets. - **Decision Outputs**: Tool purchase timing, expansion plans, outsourcing choices, and load-shift strategies. - **Lead-Time Challenge**: Long equipment procurement cycles require early decisions under uncertainty. **Why Capacity planning Matters** - **Supply Assurance**: Under-capacity leads to shortages, backlog growth, and missed commitments. - **Capital Efficiency**: Over-capacity drives low utilization and margin pressure. - **Strategic Timing**: Correct timing of expansion is critical in cyclical semiconductor markets. - **Risk Reduction**: Scenario-based plans improve resilience to demand shocks and yield changes. - **Execution Stability**: Feasible capacity baseline reduces firefighting in daily operations. **How It Is Used in Practice** - **Scenario Modeling**: Evaluate base, upside, and downside demand with sensitivity to key constraints. - **Bottleneck Focus**: Prioritize capacity actions at true constraint tool groups. - **Rolling Reforecast**: Update plans regularly as demand, yields, and tool performance evolve. Capacity planning is **a high-stakes strategic function in fabs** - accurate forward capacity decisions are essential to balance service reliability, profitability, and long-term competitiveness.