| Summary: | 碩士 === 國立臺灣大學 === 商學組 === 102 === This research applies the SCP (structure-conduct-performance) paradigm with concepts of game theory and analytical approaches of the system dynamics. First, we establish a non-cooperative, prisoner dilemma-like game of arm race based on the scenario occurred in the DRAM market. The rationale of non-cooperation is mainly due to the presence of financial incentives for technology advancement undertaken by DRAM players, which then drives these players to invest all available resources to achieve technology lead, in terms of manufacturing process line width and production yield. Given such dominant strategy for all DRAM makers, the marginal players like Taiwanese firms will be forced out eventually due to limited capacity of resources. We further backup such conceptual speculation with comparison of key financial performance measures among Taiwan DRAM makers and the representative international player during the past 20 years. Based on our findings, we suggest two feasible competitive strategies for Taiwanese DRAM makers that survived from the last industry downturn: 1) to form strategic alliance with international leading firm and stay in the game of arm race, or preferably, 2) to target a niche segment of the DRAM market that is lack of incentives for the major players.
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