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. Note to Practitioners-To survive in the highly competitive business environments of these days, semiconductor manufacturing companies, like many others, should operate their facilities at the maximum effectiveness and efficiency, and this requires careful production planning and scheduling, among other approaches. In this paper, we propose a two-level HPP method for a semiconductor wafer fabrication facility (fab) producing multiple product types, such as ASIC products and system large-scale integrated circuits, with different due dates and different process flows. In the proposed method, a production plan is generated by solving a LP model with aggregated information in the higher level, and operations are scheduled with a priority-rule-based scheduling method, and feasibility and goodness of the schedule as well as the production plan are checked and evaluated with a discrete-event simulation model in the lower level. We adopt an iterative scheme to obtain a good and feasible production plan. Results of computational experiments show that the proposed method works better than a method suggested in an earlier research in terms of both the total cost, which is composed of production, inventory and backorder costs, and the total tardiness of the orders. Also, it is found that by employing good scheduling rules rather than simple and intuitive rules, one can obtain better overall plans for the fab, as well as better schedules for the workstations. The proposed methodology can be practically used in many real fabs, since the approach is rather general and it can be applied to various types of fabs provided that there is a simulation model of the fab. Moreover, it can deal with planning and scheduling problems of large sizes, i.e., those producing a large number of product types with distinct due dates, and it generates good production plans and schedules without requiring excessively long computation time.