Risk management strategy for semiconductor fabs - started from game theory

The ever changing and the more competitive hi-tech environment, the business units always have the profit and product as first priority. But normally the wishes are not always come true, some outrages can prohibit the managers to reach their business goal. One of the example is the semiconductor business are very good in 1999. No one will expect that there will be a power outage (once in a 10 years Taipower history in Hsin Chu area). The following is the 100 years catastrophic earthquake in September 21. Around the world, there are lots of catastrophic events like Iraq wars, 911 terrorist attack and nature disaster, which might impact the business. The question that is raised by senior managers is: (1) are the events predictable? (2) any strategies to control the damages? (3) does the events cause crisis or opportunity? This work discusses game theory developed by John Von Neumman and Oskar Morgenstern on the strategic management to combine with the theory of risk management to see any opportunity that a business can turn the risk into opportunity. The game theory includes: (1) how to be insight in the chaos (2) decision model in the uncertainty (3) cost-effectiveness analysis in the risk control. Four risk management strategies are adopted as (1) risk avoidance (2) risk mitigation (3) risk transfer and (4) risk reduction are assessed in different scenarios by using the game theory. It is a new logic regarding to implement the strategic management methodology in risk management which intend to help senior managers to use their business habit which include concerns of the risk in their decision making process. And the paper will provide some ideas of planning and implementation of the risk management strategies in the decision making process.