Abstract
Fault Detection and Diagnosis (FDD) in complex industrial systems requires methods that can handle uncertain operating conditions, soft thresholds, evolving sensor behavior, and increasing volumes of heterogeneous data. Traditional model-based or rule-driven approaches offer interpretability but lack adaptability, while purely data-driven and Large Language Model (LLM)-based methods often struggle with consistency, traceability, and causal grounding. Dynamic Master Logic (DML) provides a causal and temporal reasoning structure with fuzzy rules that capture gradual drift, soft limits, and asynchronous sensor signals while preserving traceability and deterministic evidence propagation. Building on this foundation, this paper presents a DML-LLM hybrid architecture that integrates targeted LLM inference to interpret unstructured information such as logs, notes, or retrieved documents under controlled prompts that maintain domain constraints. The combined system integrates Bayesian updating, deterministic routing, and semantic interpretation into a unified FDD pipeline. In a semiconductor manufacturing case study, the proposed framework reduced time to detection (TTD) from 7.4 h to 1.2 h and improved the F1 score from 0.59 to 0.83 when compared with conventional Statistical Process Control (SPC) and Fault Detection and Classification (FDC) workflows. Provenance completeness increased from 18% to 96%, while engineer triage time was reduced from 72 min to 18 min per event. These results demonstrate that the hybrid framework provides a scalable and explainable approach to anomaly detection and fault diagnosis in sensor-rich industrial environments.