After a roughly six-month downturn in from late 2025 to March 2026, semiconductor stocks are booming. April 2026 was perhaps the hottest run for chip stocks ever. At least the hottest run since the semiconductor industry was tracked as a standalone thing. But why? And why in particular are IDMs leading the charge? And… what’s an IDM?
What’s a semiconductor IDM?
In the world of semiconductors, an IDM (integrated device manufacturer) is a company that both designs and manufactures their own products. It’s the original business model of the industry dating back to the beginning some 70 years ago.
Some of the oldest and most iconic names in the semiconductor universe are IDMs:
- Intel
- Samsung
- Texas Instruments
- Micron, SK hynix, and the other hot memory IDMs
- STMicroelectronics
As the industry analogy goes, IDMs are like a farm-to-table restaurant. It’s a vertically integrated business that produces its own ingredients, creates recipes, and does the cooking for customers. Similarly, IDMs do the engineering and design, buy manufacturing equipment to build their own fabs, and work with customers to make sure they have the chips they need — both customized product and general “merchant” parts and pieces a customer may need available in inventory for many years.
The pros and cons of the IDM model
The IDM business model can work great as the company has a lot of control over the entire semiconductor process. The IDM doesn’t have to wait in queue with competitors for an outsourced foundry to provide the parts and pieces they need. And collaboration between engineering teams and the manufacturing floor can (theoretically) increase time to market and quality of product.
However, like a farm-to-table restaurant, vertical integration does bear extra risk. If customer demand decreases, the IDM could be left with idle fab manufacturing capacity. Since these facilities are so costly to build and operate, this can be financially devastating.
Thus, over the decades, many semiconductor industry companies have specialized. Many handle just engineering and design of chips (“fabless,” as in no semiconductor fab, like Nvidia), while others handle only manufacturing (foundry, as in they only offer fabs as a service, like Taiwan Semiconductor Manufacturing).
This specialization makes sense, as both chip design and manufacturing have gotten more complex and expensive over the years. In order to simplify operations and reduce financial risk, many companies do just one or the other.
Why IDM stocks now?
Despite some of the financial risks, IDMs are back in style right now. One of the hallmarks of the bull market of the 2020s (and one of the original thesis points for Chip Stock Investor at inception in 2022) was that manufacturing (asset-heavy industry) was going to make a comeback.
IDMs are very much a heavy industry and part of the manufacturing sector of the economy. A lot of global investment is being poured back into this old business model. See our series on this last covered in February 2026, see video linked at top of article.
But there’s more to the story as to the why now in 2026 part of the question. It helps to understand that, within the world of IDMs, there is also product specialization, and end market customer demand plays a big part in whose stock is running higher, and when.
Put simply, after several years of idle fab capacity in the aftermath of the chip shortage of 2021-22, customer demand is picking up. The accelerated computing super-cycle has come for the IDMs, idle fab capacity is getting utilized again, and revenue and profit margins are rebounding.
IDMs are back. “Manufacturing is cool again.” –Kasey–
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