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Formal definitions for the components of efficiency and capacity, mathematical formulas for computing overall efficiency, and data collection strategies are proposed for rigorous measurement of equipment efficiency and equipment capacity. Measurement of overall equipment efficiency (OEE) under the TPM paradigm is extended to support the maintenance of capacity parameters for production planning. The weaknesses of equipment analyses based on utilization and aggregate UPH (units per hour) figures are contrasted against the robustness of the proposed approach. Implementation in semiconductor factories is described.