Knowledge transfer and the limits to profitability: an empirical study of problem-solving practices in the semiconductor industry

A broadly based empirical study of problem-solving practices in the semiconductor industry reveals that the inability to transfer knowledge rapidly is limiting the profitability of semiconductor manufacturers. Extremely high user loss rates force users and suppliers of semiconductor process and diagnostic technology to solve problems as rapidly as possible. Unfortunately, both sides possess knowledge that is required to solve problems but cannot be transferred rapidly enough for extensive losses to be avoided. Collaboration between users and suppliers, in which problem solvers physically relocate from one side's site to the other's, is minimizing losses but creating a shortage of experts that threatens the health of the industry. A series of practices that will reduce the cost of knowledge transfer is presented. Foremost among these is the establishment of an Internet-enabled toolkit for remote diagnostics and repair.