What does OEM mean?

As the name implies, OEM means that the factory does not need to equip itself with raw materials in the production process, but outsources this business to material manufacturers, which reduces the production cost. Compared with the way of purchasing raw materials independently, OEM can better control costs, improve production efficiency and avoid trading disputes with raw material suppliers.

OEM is an increasingly common business model. Especially in the electronics industry, OEM has become the mainstream industry. Many IT hardware manufacturers choose OEM to minimize the risk of R&D and production. At the same time, the experience and scale advantages accumulated by foundry manufacturers in production can also be better reflected, which can better improve the efficiency of the whole industry.

The development of OEM business is inseparable from the benign interaction between the upstream and downstream of the industrial chain. Material manufacturers can rely on the sales channels of contract manufacturers to expand the market, and contract manufacturers also rely on the advantages of capital and productivity to promote the upgrading of material production industry. In the future, the business model of OEM will be more mature and will continue to penetrate into more fields to help promote industrial upgrading and prosperity.