Knowledge Center
Knowledge Center

Original Equipment Manufacturer (OEM)

The company that buys raw goods, including electronics and chips, to make a product.


An original equipment manufacturer (OEM), or systems company, purchases parts to make an product, such as an automobile, a washing machine, or a smartphone, to sell to the end user. The OEM designs, manufacturers, and distributes the device. This company is usually a customer of a semiconductor company, although traditionally with an automotive industry, the OEM — the car manufacturer — may be buying systems from another systems company, referred to as a Tier 1. A complex product, such as an automobile, may have parts and systems made by many companies in the tiers. The semiconductor company may sell its chips to a Tier 1, 2, or 3, etc. Things are changing, though, and increasingly, the semiconductor company is working directly with the automotive OEMs.

Some OEMs are also IDMs — or have a foundry (Samsung and Samsung Foundry).Some OEMs also design their own chips, and like a fabless semiconductor company, they will have a foundry manufacture the chips.