Medical Device Manufacturing Outsourcing Market Analysis North America, Asia, Europe, Rest of World (ROW) - US, China, Germany, Japan, India - Size and Forecast 2024-2028

Medical Device Manufacturing Outsourcing Market Size 2024-2028

The medical device manufacturing outsourcing market size is estimated to grow by USD 50.44 billion between 2023 and 2028 accelerating at a CAGR of 10.87%. The expansion of the market is driven by several key factors. Original equipment manufacturers (OEMs) are increasingly prioritizing the reduction of manufacturing costs for medical devices such as diagnostic wearable medical devices, seeking efficient and cost-effective solutions through outsourcing. Additionally, the escalating complexities in product design and development necessitate specialized expertise and advanced manufacturing capabilities, which outsourcing partners can provide. Emerging nations are becoming favored hubs for production of medical devices due to their lower labor costs and growing industrial capabilities, further boosting the market.

What will be the size of the Market During the Forecast Period?

To learn more about this medical device manufacturing outsourcing market report, Get Market Analysis Report Sample

A stringent regulatory landscape imposes rigorous standards and compliance requirements, posing hurdles for outsourcing firms. Fierce competition within the medical device contract manufacturing market intensifies the need for differentiation and innovation among service providers. Moreover, delays in fulfilling contractual obligations and implementing new technologies can impact the timeliness and quality of production. Despite these challenges, the market continues to grow as the demand for high-quality, cost-efficient medical devices rises globally, driving OEMs to increasingly rely on outsourcing partners to meet their manufacturing needs.

Medical Device Manufacturing Outsourcing Market Segmentation

The medical device manufacturing outsourcing market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• 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

By Product

The market share growth by the EMS segment will be significant during the forecast period. Electronics manufacturing services (EMS) include remote 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.

Get a glance at the market contribution of various segments in the medical device manufacturing outsourcing market. Request PDF Sample

The EMS segment was the largest and was valued at USD 26.77 billion in 2018. 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.

Regional Analysis  

For more insights on the medical device manufacturing outsourcing market share of various regions, Request PDF Sample now!

North America is estimated to contribute 37% 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 as artificial intelligence. Such factors will increase the market growth during the forecast period.

Medical Device Manufacturing Outsourcing Market Dynamics

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 management devices, 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 medical device manufacturing outsourcing market growth 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 services 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, 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 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.

Further, 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 medical device manufacturing outsourcing market growth.

Customer Landscape

The medical device manufacturing outsourcing 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 medical device manufacturing outsourcing market forecasting 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, they focus on complete services that range from initial design through manufacturing and full supply chain management for medical devices, life science, and industrial products.

The medical device manufacturing outsourcing market growth analysis 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.
• 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.

Market Analyst Overview

The market is a dynamic landscape encompassing a plethora of services vital for the healthcare industry. Quality assurance services and regulatory affairs services ensure adherence to stringent standards and regulations. From product design & development services to product testing & sterilization services, every stage is meticulously managed. Product implementation services and product upgrade services ensure seamless integration and continuous improvement. Product maintenance services guarantee optimal functionality post-launch. Contract manufacturing services play a pivotal role, especially for IVD, ophthalmic, and general & plastic surgery devices. They also extend to drug delivery, dental, endoscopy, and diabetes care technologies. Addressing cardiovascular devices and neurological disorders, these services connect with medical practitioners for early diagnosis and treatment. Cosmetic surgeries and physical appearance enhancements are also part of the spectrum.

The medical device manufacturing outsourcing market is experiencing growth due to increasing demand for oncology, orthopedic, and central nervous system disease treatments. Services like product design & development, testing, sterilization, and product implementation are crucial for devices such as coronary stents, orthopedic devices, and diagnostic imaging tools. Outsourcing also includes IVD, ophthalmic, and wound care products. Companies rely on contract manufacturing services for efficient production, alongside quality assurance and regulatory affairs services to ensure compliance. Scientific innovation drives product upgrade, maintenance, and testing services, helping manufacturers meet evolving industry standards while enhancing device performance and patient outcomes.

Additionally, surgical devices and procurement processes rely on polymers and cutting-edge technology, ensuring patient epidemiology and addressing orthopedic issues and cardiac disorders. IT outsourcing and business process outsourcing (BPO) optimize operations, while logistics streamline delivery. Original equipment manufacturers (OEM) collaborate with contract manufacturing organizations (CMOs), leveraging modern technology and state-of-the-art equipment while safeguarding security and privacy through data confidentiality and intellectual property protection. In this multifaceted arena, emphasis on medical device quality is paramount, shaping the future of healthcare.

Get Sample PDF!

What are the Key Data Covered in this Medical Device Manufacturing Outsourcing 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 2024 and 2028
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming medical device manufacturing outsourcing 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

We can help! Our analysts can customize this medical device manufacturing outsourcing market forecast report to meet your requirements. Get in touch