Setting daily production targets with novel approximation of target tracking operations for semiconductor manufacturing

•We investigate how daily target setting induces variations (TIV) through target-tracking machine allocation and lot dispatching (MALD).•We present a novel design of approximation approach, TaTIV, to take TIV into setting daily targets systematically for semiconductor fabs.•We develop approximation models to characterize MALD effects on mean performance and TIV of each machine group and production flows of the fab.•A fixed-point iteration is adopted to solve the chicken-egg problem between target setting and target-induced wafer flow estimation.•We show that TaTIV improves fab throughput and cycle time performance by exploiting fab data-based analysis and simulation.