OEM stands for Original Equipment Manufacturer. It is a term used to describe a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. OEMs make parts to sell to Value-Added Resellers (VARs) . Although some OEMs make complete items for a VAR to market, they usually dont determine the finished product. An OEM may manufacture electronic components for a company like Samsung, the VAR that makes HDTVs. OEMs rely on their ability to drive down the cost of production through economies of scale. Using an OEM also allows the purchasing company to obtain needed components or products without owning and operating a factory. OEMs make components of another company’s products. An OEM component might be a part, a subsystem, or software. Examples include operating systems (OS) and microprocessors in computers. Typically, the computer manufacturer makes neither the microprocessor nor the OS. Rather, the computer maker buys these on an OEM basis from other companies.

In the auto repair industry, OEM parts are those products used by a car manufacturer. Aftermarket parts are made by a third-party manufacturer but may be compatible with the same vehicles. In the software industry, OEM refers to the software or hardware pre-installed on a new computer or device.

In summary, OEM refers to a company that produces parts or components that are used in another companys product. It can be used to describe a variety of industries, including automotive, electronics, and software.