Tony Funderburk is Director of Global Electronics & High Tech PLM Sales at PTC, where provides guidance and support for companies looking to accelerate innovation, manage product complexity, and drive digital transformation through Product Lifecycle Management (PLM) solutions. With more than 25 years of experience in enterprise software sales and leadership, Tony brings deep expertise across the electronics and semiconductor industries, working closely with organizations to improve product development, strengthen collaboration, and build more resilient operations.
Key takeaway: Hybrid IDMs — semiconductor companies that manufacture chips in-house and through external foundries — face a complex product lifecycle management challenge. They have to coordinate product data, BOMs, engineering changes, IP controls, and quality traceability across two manufacturing environments at the same time.
Most conversations about semiconductor complexity focus on process nodes, yield curves, capacity constraints, or supply chain risk. For hybrid Integrated Device Manufacturers (IDMs), another challenge is easy to overlook: managing the product lifecycle across owned fabs and external manufacturing partners.
Companies such as Analog Devices, NXP, Infineon, ON Semiconductor, STMicroelectronics, and Renesas operate in this middle ground. They design their own products, manufacture some internally, and outsource others to foundries and OSATs for fabrication, packaging, and test. The model gives them flexibility and resilience. It also creates a product data problem that pure IDMs and fabless companies face differently.
Hybrid IDMs need to maintain one controlled product definition across environments that use different systems, processes, data formats, and governance models. As advanced packaging and chiplet architectures expand, that coordination burden directly affects time-to-market, quality, cost, and margin.
Why the hybrid model is different
A pure IDM controls design, fabrication, and often packaging within its own operating environment. A fabless company outsources manufacturing and manages product data through external partners from the start. Hybrid IDMs sit between those models. Some products move through internal fabs. Others go to external foundries. Some combine internally and externally produced components in a single package.
That dual environment makes lifecycle management hard. Product data must stay synchronized across design, wafer fabrication, packaging, test, qualification, and release, even when parts of the process happen outside the company’s direct systems and control.
That is why hybrid IDMs see such broad PLM value: they have to govern internal and external manufacturing data together.
Where lifecycle complexity shows up
These issues are different manifestations of the hidden cost of disconnected engineering, but the internal-external manufacturing boundary makes their effects especially pronounced for hybrid IDMs.
For hybrid IDMs, lifecycle complexity shows up in four connected areas: BOM management, engineering change control, quality traceability, and IP governance. Each gets harder when a product moves between internal and external manufacturing environments.
BOM fragmentation
A product built partly in-house and partly externally may have different bill-of-materials views at each stage. The engineering BOM captures design intent. Manufacturing BOMs define how the product gets built across wafer fabrication, packaging, and test. In a hybrid model, some manufacturing views may live in internal systems while others sit with foundries or OSATs.
That fragmentation creates real risk. More than 60% of semiconductor companies use six or more disconnected systems to manage product data, according to industry survey data cited in PTC’s semiconductor PLM framework. For hybrid IDMs, the risk grows every time product data crosses the internal-external boundary.
Engineering change misalignment
A design change may come from a yield issue, customer requirement, or reliability finding. Once it does, the change has to move through both manufacturing environments. Internal teams may follow established ECO processes. External partners need controlled release, review, and approval cycles. If timing or revision control breaks down, different manufacturing paths can end up building against different versions of the same product definition.
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Read the blogTraceability and IP control
Quality traceability gets harder once data leaves the enterprise. Semiconductor companies are 18% more likely than other industries to report little or no coordination across external partners, including foundries, OSATs, and packaging suppliers. For hybrid IDMs, that gap is part of the operating model.
Companies also have to protect design files, process information, product specifications, and customer IP as data moves between internal teams and external partners. Intel's 2023 internal foundry model announcement identified complete segregation of foundry customers' data and IP as a core design principle, emphasizing a security-first architecture with strict data separation.
For hybrid IDMs, boundary management depends on systematic controls — not informal file sharing or contract language alone.
Why EDA and ERP are not enough
Stronger EDA or ERP systems may help, but they do not solve the full product lifecycle problem. Each system handles a different part of the workflow.
EDA tools manage IC design data, including schematics, simulations, layouts, and verification. ERP systems manage financial transactions, procurement, inventory, and fulfillment. Neither governs the full product definition across design, manufacturing, change, quality, compliance, and partner collaboration.
Hybrid IDMs are exposed in the space between those systems. Product data often gets scattered across spreadsheets, shared drives, homegrown databases, email, and partner portals. PLM does not replace EDA or ERP. It connects them with a governed, version-controlled product data backbone that links upstream design intent to downstream manufacturing execution.
Why chiplets raise the stakes
Advanced packaging and chiplet architectures raise the pressure because the internal-external manufacturing split may now exist inside a single package. A multi-die module may combine silicon from an internal fab, an external foundry, a specialized substrate supplier, and an OSAT assembly partner.
That makes governed product data harder to manage — and more valuable. The chiplet market was valued at $5.3 billion in 2024 and is projected to reach $42.8 billion by 2029. As chiplet adoption grows, hybrid IDMs will need lifecycle systems that can manage die-level data, packaging BOMs, partner approvals, test records, and qualification evidence across multiple organizations.
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Learn WhyWhat leaders should prioritize
Hybrid IDMs cannot remove complexity from their manufacturing model, but they can reduce the drag it creates. Product data governance needs to become a core operating capability, not a cleanup effort after problems surface.
Establish a single source of truth
Organizations need one governed source of truth for parts, BOMs, specifications, change history, qualification records, and release status. Internal teams and external partners should work from the same controlled product definition, even when they use different systems.
Extend change control across partners
Engineering change processes need to cross organizational boundaries. ECOs should trigger auditable workflows that coordinate internal manufacturing teams, foundries, OSATs, and quality stakeholders — instead of relying on ad hoc email chains or manual spreadsheet updates.
Connect traceability across the lifecycle
Traceability needs to connect requirements, design inputs, manufacturing records, test results, and qualification evidence. That level of connection matters especially for hybrid IDMs serving automotive, aerospace and defense, or medical device markets, where compliance depends on a complete, auditable product record.
Govern foundry and OSAT handoffs
Foundry and OSAT handoffs need formal release controls, revision management, audit trails, and IP segregation. These handoffs are lifecycle control points that determine whether the hybrid model scales cleanly or builds up data debt.
The business impact can be substantial. When product data connects design, manufacturing, and quality, teams can move faster, reduce rework, and make better decisions across the lifecycle. For hybrid IDMs, those gains depend on how well the company manages the boundary between internal and external manufacturing.
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Build AI-Ready DataTurning lifecycle complexity into advantage
Hybrid IDMs get real strategic advantages from their manufacturing model. They can optimize internal fabs for differentiated products, access external capacity and advanced process nodes, and spread risk across a broader manufacturing ecosystem. The tradeoff is lifecycle complexity that grows with every product, partner, change, and package variant.
As semiconductor architectures become more modular, the companies that improve speed and margin will be the ones that treat PLM as a strategic operating system. For hybrid IDMs, the question is whether they can coordinate both sides of the manufacturing boundary with enough control, traceability, and speed to turn complexity into an advantage.
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