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This paper focuses on a production planning and scheduling problem in a semiconductor wafer fabrication facility. We propose a two-level hierarchical production planning (HPP) method that employs an itmmerative procedure for production planning and operations scheduling. In the method, production plans are obtained with a linear programming (LP) model in the aggregate level, and schedules at the machines are obtained with a priority-rule-based scheduling method and evaluated with discrete-event simulation in the disaggregate level. An iterative scheme is adopted for obtaining a good and feasible production plan. The proposed method is evaluated through simulation experiments and the results show that the method works better than an existing algorithm in terms of the total production cost and total tardiness of orders.