An integrated device manufacturer (IDM) is a semiconductor company that designs chips and manufactures them in its own facilities. The label describes a business model, not a guarantee that every chip or every production stage is handled in-house: an IDM may also use outside foundries or provide manufacturing services to other companies.
What does an integrated device manufacturer do?
An IDM combines chip design with in-house manufacturing. Intel’s plain-language definition is a company that both designs and builds its own semiconductor chips. Samsung Semiconductor describes the model more broadly as spanning semiconductor design through production of finished products.
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In practice, “manufacturing” can cover several distinct stages: wafer fabrication, assembly, packaging and testing. A company may control some stages and rely on specialist providers for others, so the IDM label should not be read as proof that it owns every step of production.
How an IDM differs from fabless and foundry companies
| Business model | Typical role | Who the factories serve |
|---|---|---|
| IDM | Designs semiconductor products and manufactures its own chips; may also offer manufacturing services. | Its own product groups, outside customers, or both. |
| Fabless company | Designs and sells chips but outsources wafer fabrication. | It typically relies on foundries to fabricate its designs. |
| Foundry | Manufactures chips for other companies, including fabless designers. | Customer companies. |
These are useful general categories, not rigid descriptions of every company. The wider supply chain can divide wafer fabrication from assembly, packaging and testing, and actual company arrangements vary by product and production stage.
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Can an IDM use outside foundries?
Yes. IDM describes a company’s capabilities and operating model; it does not mean that every product must be made internally. A company can combine its own factory network with external manufacturing capacity, and it can make some products itself while outsourcing fabrication for others.
Intel’s IDM 2.0 example
Intel’s 2021 IDM 2.0 description combined internal manufacturing, external foundry capacity and foundry services for customers. The company said it planned to increase external foundry use for some products while also making manufacturing capacity available to customers. Its SEC filing described an intention to make most products in its own factories while using both internal and external capacity. These are company-specific disclosures, not a rule that applies to every IDM.
An internal foundry relationship
In June 2023, Intel described a model in which its product groups would engage with its manufacturing group through a foundry-style relationship. Intel said that group would have its own profit-and-loss reporting and that market-based pricing would extend to internal business units. This illustrates how a company can reorganize its internal manufacturing relationships without giving up integrated manufacturing capabilities.
How to tell whether a company fits the IDM model
For a specific company, look beyond the label and check its disclosures for these details:
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- Stages it controls: Separate chip design, wafer fabrication, assembly, packaging and testing rather than treating “manufacturing” as one step.
- Factory customers: Determine whether production serves the company’s own product groups, outside customers, or both.
- Internal versus external production: Look for disclosures about which products or manufacturing needs are handled in company factories and which use outside capacity.
- Foundry services: Check whether the company manufactures chips for other businesses as well as for its own product lines.
Company structures and sourcing can change, so use current company disclosures when classifying a particular business. An IDM may outsource some production, and a company that offers foundry services may still design and sell its own chips.
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