During the last ten years, the semiconductor industry in Korea has grown rapidly to the world third largest supplier with the leading position specifically in DRAM area. However, the world DRAM market has been slowed down and the memory chip industry has experienced the profit margin plummeted in the last couple of years. The semiconductor industry in Korea now faces a big challenge to reorganize the business structure to gain a competitive advantage of the industry by focusing on the advanced system logic areas that include products such as microprocessors, complex ASICs and ASSPs.
This study aims at providing the top managers in the system LSI industry with guidelines that help them in strategic organizational decision making; how to reorganize the business structure. Three main factors, task characteristics, process characteristics, and current organizational characteristics have been discovered that have to be considered in designing the appropriate organizational structure for the system LSI area. These factors are applied to the five-case analyses in which one memory case and four system LSI cases are analyzed and compared to find out the key success factors that distinguish the performance differences between them. As a result of the case analyses, new organizational model is derived that concludes that the system LSI area should be dual-structured as functional organization for development stage and matrix organization for application stage.
