Medical Device Manufacturing Outsourcing Market - North America, Europe, EMEA, APAC : US, Canada, China, Germany, UK - Forecast 2023-2027

Medical Device Manufacturing Outsourcing Market Forecast 2023-2027

The Medical Device Manufacturing Outsourcing Market size is estimated to grow by USD 46.24 billion between 2022 and 2027 accelerating at a CAGR of 10.85%. The market's expansion hinges on various factors, such as OEMs increasingly prioritizing the reduction of manufacturing costs for medical devices, the escalating intricacies in product design and development, and emerging nations emerging as favored outsourcing hubs for medical device production. However, the market also faces challenges, including a stringent regulatory landscape, fierce competition within the market, and delays in fulfilling contractual obligations and implementing new technologies.

What will be the size of the Medical Device Manufacturing Outsourcing Market During the Forecast Period?

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Market Segmentation

This market research report extensively covers market segmentation by product (EMS, raw materials, and finished goods), medical device regulatory classification (class ii, class iii, and class i), and geography (North America, Asia, Europe, and Rest of World (ROW)). It also includes an in-depth analysis of drivers, trends, and challenges. 

By Product

The market share growth by the EMS segment will be significant during the forecast period. Electronics manufacturing services (EMS) include patient monitoring, diagnostic imaging, in-vitro diagnostics, and pacemakers. The major companies that offer EMS include Jabil Inc., Celestica Inc., Sanmina Corp., and Flex Ltd. The global EMS market is expected to witness strong growth over the forecast period. 

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The EMS segment was valued at USD 25.49 billion in 2017 and continued to grow by 2021. The use of electronics in the healthcare industry is growing rapidly. The advent of robotics, wireless products, and advanced medical software has increased the demand for EMS. Also, OEMs are under constant pressure to reduce their manufacturing costs and focus on operational/growth strategies; they are opting for outsourcing companies to design and deliver their products and reduce the cost of production. EMS providers offer effective solutions to reduce cost, besides increasing quality, the value of innovation, and efficiency, thus reducing the time to market a new product and improving supply chain management. The above factors will increase segment growth during the forecast period.

By Region

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North America is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Outsourcing is contracting out a business process, service, or product to a third party. Outsourcing includes both foreign and domestic contracting and sometimes includes relocating a business function or service to another country, known as offshoring. The globalization of medical device manufacturers combined with the growing complexity of medical devices fuels the need for medical device outsourcing. The benefits of outsourcing include reduced costs, improved quality, access to new geographical and global capabilities, the ability to focus on improving operating margins and core competencies, reduced risks (regulatory), and access to leading experts and technologies. Such factors will increase the market growth during the forecast period.

Market Dynamics and Customer Landscape

The market is witnessing significant growth driven by several key factors. Firstly, the increasing prevalence of chronic diseases such as oncology, central nervous system diseases, and cardiovascular diseases has led to a rising demand for specialized medical devices tailored to these conditions. This demand, coupled with advancements in scientific innovation, has created opportunities for outsourcing firms to provide quality assurance, regulatory affairs, product design & development, and testing services to meet the evolving needs of the healthcare sector.

Moreover, the complexity and specialization of medical devices, such as coronary stents, orthopedic devices, and wound care products, require expertise in assembly, packaging, and the integration of electronic components and sensors. Outsourcing companies play a crucial role in providing these services efficiently, allowing medical device manufacturers to focus on core competencies like product innovation and market expansion. Additionally, the aging population and the growing prevalence of age-related conditions have further fueled the demand for medical devices, driving the outsourcing market to cater to the production, maintenance, and upgrading of these devices to ensure they meet the highest quality standards and regulatory requirements.

Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The market is experiencing significant growth due to various factors, with one key driver being the growing focus of Original Equipment Manufacturers (OEMs) on reducing manufacturing costs. With healthcare budget constraints prevailing globally, OEMs are under pressure to maintain quality healthcare services while minimizing expenses. To achieve this, many OEMs are turning to outsourcing as a cost-effective solution. Outsourcing enables them to streamline operations, reduce production costs, and optimize resource utilization, thereby enhancing overall efficiency and competitiveness in the market.

Moreover, outsourcing manufacturing allows OEMs to leverage the expertise and capabilities of specialized contract manufacturers, particularly in areas such as product design, testing, sterilization, and maintenance. By partnering with experienced contract manufacturers, OEMs can access advanced manufacturing technologies, skilled labor, and efficient production processes, leading to improved product quality and accelerated time-to-market. As OEMs seek to enhance their cost-effectiveness and operational efficiency, the outsourcing of manufacturing is expected to continue to grow, driving the expansion of the market in the coming years.

Significant Market Trends

A key trend driving the market growth is the technological advances for manufacturing the devices. The market has been witnessing a growing trend of new technologies such as 3D printing technology and athermal lasers. OEMs are continuously adopting these new innovative technologies to meet the growing customer demand. OEMs are also seeking to outsource services to contract manufacturers to implement such innovative technologies. This technique helps the companies launch their new products to the market quickly.

Advanced technology includes the use of Industry 4.0 technologies, such as cloud computing, machine-to-machine communication, cyber-physical systems, and the introduction of advanced automation. These technologies help overcome production-related challenges. The enhanced connectivity and data-gathering capabilities of these technologies help in achieving better end results and in following regulation-compliant manufacturing processes with efficient inventory and production management. These technologies are highly adopted by companies to enhance their manufacturing process and achieve better outputs.

Major Market Challenge

A stringent regulatory environment is one of the key challenges hindering the market growth. Regulatory compliance plays a significant role in outsourcing the device manufacturing by OEMs. In cases where the manufacturing is outsourced overseas, most countries have their own regulations for medical products. Depending on the type of product and places where it will be marketed, the US FDA and the European Commission have implemented stringent regulations to be adhered to by outsourcing service providers for quality control and meeting environmental requirements.

The US FDA's 510(k) process for clearing certain classes of medical devices has been under considerable scrutiny in recent years. For example, regulatory approval for Class III devices takes a longer time in the US. Manufacturers of medical devices must adhere to regulations, including testing, quality control, and documentation procedures. Compliance with regulatory authorities is subjected to continual reviews and monitored through periodic inspections and product field monitoring. Non-compliance with such regulations will affect the business activities of companies. Therefore, stringent regulatory guidelines pose a serious challenge to the global medical device manufacturing outsourcing market.

Key Market Customer Landscape

The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Medical Device Manufacturing Outsourcing Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Cadence Inc - The company offers medical device manufacturing outsourcing such as Cadence Device for medical device OEMs. Also, this segment focuses on complete services that range from initial design through manufacturing and full supply chain management for medical devices, life science, and industrial products.

The market report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Benchmark Electronics Inc.
• Celestica Inc.
• Cirtec Medical
• Eurofins Scientific SE
• Flex Ltd.
• Gerresheimer AG
• Heraeus Holding GmbH
• Integer Holdings Corp.
• Jabil Inc.
• Kimball Electronics Inc.
• NN Inc.
• Nortech Systems Inc.
• Plexus Corp.
• Sanmina Corp.
• Tata Sons Pvt. Ltd.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Outlook 
  • EMS
  • Raw materials
  • Finished goods

• Medical Device Regulatory Classification Outlook 
  • Class II
  • Class III
  • Class I

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • Asia
    • China
    • India
  • ROW
    • Australia
    • Argentina
    • Rest of the world

Market Analyst Overview

The market is witnessing significant growth due to factors such as scientific innovation, increased demand for quality assurance and regulatory affairs services, and the need for efficient product design, development, testing, and maintenance services. This market caters to various medical specialties including oncology, central nervous system diseases, coronary stents, orthopedic devices, wound care, and more. Outsourcing services encompass a wide range of areas such as orthopedic, IVD, ophthalmic, general surgery, and drug delivery, facilitating early diagnosis and treatment for patients.

Key components of this market include assembly, packaging, electronic components, sensors, and procurement, with a focus on enhancing productivity and reducing time-to-market. Security, data confidentiality, and intellectual property protection are paramount, driving the demand for IT outsourcing and ensuring compliance with regulatory standards. Contract Manufacturing Organizations (CMOs) equipped with modern technology and state-of-the-art equipment play a crucial role in maintaining medical device quality and meeting the diverse needs of medical practitioners and patients.

Additionally, the market offers a wide range of services to cater to the diverse needs of the healthcare industry. This includes quality assurance services, product design & development, testing & sterilization, implementation, upgrade, and maintenance services. These services cover various medical specialties such as general & plastic surgery, dental, endoscopy, diabetes care, cardiovascular devices, and cosmetic surgeries, addressing patient needs related to physical appearance and age-related conditions. The market also involves the manufacturing of surgical devices using advanced materials like polymers, considering patient epidemiology and specific disorders like neurological and cardiac conditions.

Original equipment manufacturers (OEMs) often outsource non-core services such as logistics and business process outsourcing (BPO) to focus on medical device technology innovation while ensuring security, privacy, and product quality. Contract manufacturing services play a vital role in the medical device manufacturing segment, facilitating the efficient production of high-quality medical devices while adhering to regulatory standards and patient safety requirements.

Medical Device Manufacturing Outsourcing Market Scope
Report Coverage	Details
Page number	171
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 10.85%
Market growth 2023-2027	USD 46.24 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	8.88
Regional analysis	North America, Asia, Europe, and Rest of World (ROW)
Performing market contribution	North America at 36%
Key countries	US, Germany, China, Japan, and India
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Benchmark Electronics Inc., Cadence Inc., Celestica Inc., Cirtec Medical, Eurofins Scientific SE, Flex Ltd., Gerresheimer AG, Heraeus Holding GmbH, Integer Holdings Corp., Jabil Inc., Kimball Electronics Inc., NN Inc., Nortech Systems Inc., Plexus Corp., Sanmina Corp., Tata Sons Pvt. Ltd., TE Connectivity Ltd., Tecomet Inc., TRICOR Systems Inc., and West Pharmaceutical Services Inc.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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