What is a tier one company?

A tier one company directly supplies the manufacturer in a manufacturing supply chain. Each tier in such a chain supplies the tier below, such as tier two company supplying a tier one company.

Tier one companies are typically the largest company in a supply line. They often supply the most critical piece of the manufacturer's product. Tiered supply chains are often used when a final product requires many parts, such as in the automobile and computer industries. Some tier one companies provide manufacturing services to allow the original manufacturer to assemble, sell and market products without having to produce pieces themselves.