In order to process a product in a semiconductor back-end facility, a machine needs to be qualified first by having a product-specific software program installed on it. Then a tool set must be available and attached on the machine while it is processing the product. In general not all machines are qualified to process all products due to the high machine qualification cost and tool set availability. However, the machine qualification decision is very important because it affects capacity allocation in the facility and subsequently affects daily production scheduling. To balance the tradeoff between the machine qualification costs and backorder costs, a product-machine qualification optimization model is proposed in this paper.