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The Medical Device Manufacturing Outsourcing Market size is estimated to grow by USD 46,241.15 million between 2022 and 2027 accelerating at a CAGR of 10.85%. The growth of the market depends on several factors, including the growing focus of OEMs on reducing medical device manufacturing costs, the growing complexities in product design and development, and the emerging countries as preferred outsourcing destinations for medical device manufacturing.
This medical device manufacturing outsourcing 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.
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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.
One of the key factors driving the medical device manufacturing outsourcing market growth is the growing focus of OEMs on reducing medical device manufacturing costs. Healthcare budget cuts across the world have increased the pressure on medical device manufacturers to offer high-quality healthcare services at low costs. As a result, manufacturers have started to cut down their operational and production costs, due to which outsourcing medical device manufacturing is gaining significant importance among OEMs. Manufacturing medical devices require high engineering capabilities and increased labor costs.
Thus, outsourcing the business will help OEMs substantially cut down product development costs. The high growth potential and increasing demand for medical device products from end-users have compelled OEMs to outsource their manufacturing capabilities. For instance, depending on the company and the product, outsourcing can save up to 15% of the total production costs. Medical device manufacturing outsourcing may reduce product development costs by 10%-30%. Thus, the growing focus of OEMs to reduce medical device manufacturing costs will lead to an increase in outsourcing of medical device manufacturing to contract manufacturers, thereby contributing to market growth.
Another key factor driving medical device manufacturing outsourcing market growth is the technological advances for manufacturing medical 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 medical device 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 vendors to enhance their manufacturing process and achieve better outputs.
A stringent regulatory environment is one of the key challenges hindering the medical device manufacturing outsourcing market growth. Regulatory compliance plays a significant role in outsourcing medical 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.
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 Medical Device Manufacturing Outsourcing Market Customer Landscape
Vendors 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.
Cadenceinc - 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 medical device manufacturing outsourcing market report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The medical device manufacturing outsourcing 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 25,498.27 million in 2017 and continue 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.
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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.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. COVID-19 led to an upsurge in the demand for North America. However, COVID-19 was under control in Q1 of 2021, but suddenly cases have been increasing since last month due to the delta variant of the virus. This has again increased the demand for PPE and other medical devices for the treatment of COVID-19. Moreover, vendors are responding to COVID-19 with an immediate change in the design of operations and uninterrupted production of necessary devices. Vendors are also shifting towards smart manufacturing to save time and increase productivity, also developing new funding plans to attract investors. This will help vendors to recover from the COVID-19 affected during the forecast period.
The medical device manufacturing outsourcing 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.
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 46,241.15 million |
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 Vendors, Market Positioning of Vendors, 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 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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