Medical Device Manufacturing Outsourcing Market size is set to grow by USD 50.44 billion from 2024-2028, Growing focus of OEMs on reducing medical device manufacturing costs to boost the market growth, Technavio

NEW YORK, July 30, 2024 /PRNewswire/ -- The global medical device manufacturing outsourcing market  size is estimated to grow by USD 50.44 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  10.87%  during the forecast period.  Growing focus of oems on reducing medical device manufacturing costs is driving market growth, with a trend towards increasing m and a activities. However, stringent regulatory environment  poses a challenge. Key market players include 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..

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Key Market Trends Fueling Growth

The medical device manufacturing outsourcing market is characterized by a high level of competition among numerous global, regional, and local players. To gain a competitive edge, companies are increasingly engaging in mergers and acquisitions (M&A) for inorganic growth. This trend is evident in the medical device manufacturing outsourcing industry, with a significant number of transactions taking place recently. Buyers utilize M&A as a strategic tool to expand their product offerings, enter new markets, and consolidate their existing businesses. This approach has led to increased inorganic growth for many companies, particularly larger players. Large entities view the medical device industry as an attractive growth market and pursue M&A strategies to expand their market presence. For instance, Eurofins Scientific SE's acquisition of Inpac Medizintechnik GmbH and WESSLING Hungary are recent examples of this trend. These acquisitions not only help companies gain market share but also facilitate technological advancements. Companies aim to leverage M&A for long-term objectives, such as expanding into new markets and enhancing their capabilities. This dynamic is expected to drive the growth of the medical device manufacturing outsourcing market in the forecast period. 

The Medical Device Manufacturing Outsourcing market is experiencing significant growth, particularly in sectors like Oncology, Coronary stents, and Wound care. Companies are outsourcing the production of Scientific innovation in devices, including Orthopedic devices, IVD, Ophthalmic, General & plastic surgery, Drug delivery, Dental, Endoscopy, Diabetes care, Cardiovascular devices, and more. Outsourcing allows for Quality assurance services, Regulatory affairs services, Product implementation services, Product upgrade services, and Product maintenance services. Contract manufacturing services cover electronic components, sensors, assembly, packaging, and procurement of polymers. Diagnostic Imaging, Orthopedic, and Cosmetic surgeries are also benefiting from this trend. Age-related conditions, cardiovascular diseases, orthopaedic issues, Neurological disorders, and Cardiac disorders are driving demand. IT outsourcing includes quality control, logistics, and productivity improvements. 

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Market Challenges

• Medical device manufacturing outsourcing is a common practice among Original Equipment Manufacturers (OEMs). However, regulatory compliance plays a crucial role in this process. For instance, when manufacturing is outsourced overseas, each country has unique regulations for medical products. The US Food and Drug Administration (FDA) and the European Commission have implemented stringent regulations for quality control and environmental requirements. The FDA's 510(k) process for clearing certain medical devices has faced scrutiny, with Class III devices taking longer approval times in the US. Adherence to regulations, including testing, quality control, and documentation procedures, is mandatory and subjected to continual reviews through inspections and product field monitoring. Failure to comply with these regulations can significantly impact business activities, making regulatory guidelines a significant challenge for the global medical device manufacturing outsourcing market.
• The Medical Device Manufacturing Outsourcing market encompasses various sectors such as general & plastic surgery, drug delivery, dental, endoscopy, diabetes care, cardiovascular devices, and more. Outsourcing medical device production offers benefits like access to modern technology and state-of-the-art equipment. However, challenges exist. For instance, medical practitioners demand high product quality and stringent adherence to regulations. Sectors like cosmetic surgeries focus on physical appearance, while age-related conditions, cardiovascular diseases, orthopaedic issues, neurological disorders, and cardiac disorders require specialized expertise. Procurement of electronic components, sensors, polymers, and assembly services are crucial. Logistics, IT outsourcing, quality control, and supply chain management are essential for productivity and time-to-market. Non-core services like testing, intellectual property protection, and data confidentiality are also critical. Contract manufacturing segments prioritize patient epidemiology, product quality, and security and privacy. Incorporating medical device technology while addressing challenges in areas like electronic components, sensors, and testing ensures a successful outsourcing partnership.

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Segment Overview 

This medical device manufacturing outsourcing market report extensively covers market segmentation by

1. Product 
• 1.1 EMS
• 1.2 Raw materials
• 1.3 Finished goods
2. Medical Device Regulatory Classification 
• 2.1 Class II
• 2.2 Class III
• 2.3 Class I
3. Geography 
• 3.1 North America
• 3.2 Asia
• 3.3 Europe
• 3.4 Rest of World (ROW)

1.1 EMS-  The Electronics Manufacturing Services (EMS) market in the medical device industry is experiencing significant growth due to various factors. Major product categories include patient monitoring, diagnostic imaging, in-vitro diagnostics, and pacemakers. Notable EMS providers include Jabil Inc., Celestica Inc., Sanmina Corp., and Flex Ltd. The global EMS market is anticipated to expand due to increasing healthcare expenditure, high growth potential in emerging economies, and technological advancements in medical devices. OEMs are outsourcing to reduce costs and focus on strategic initiatives. Robotics, wireless products, and advanced medical software are driving demand for EMS. EMS providers offer cost savings, improved quality, innovation, and efficiency, enabling OEMs to bring new products to market faster and manage their supply chains effectively. Cost pressures and the need for profitability in low-to-medium volume manufacturing are key drivers for outsourcing. In the US, the Affordable Care Act is expected to boost EMS providers, leading to increased outsourcing and market growth. EMS providers can upgrade electronic designs within existing medical devices, further fueling market growth.

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Research Analysis

The Medical Device Manufacturing Outsourcing Market encompasses various medical devices and technologies, including Oncology, Coronary stents, Orthopedic devices, Wound care, and Diagnostic Imaging. These devices undergo scientific innovation to improve patient outcomes and address unmet medical needs. Quality assurance services and regulatory affairs services ensure compliance with industry standards and regulations. Product implementation, upgrade, and maintenance services enable seamless integration and continuous improvement of devices. Contract manufacturing services provide economies of scale and expertise in device production, assembly, packaging, and procurement of components such as electronic parts, sensors, polymers, and raw materials. Age-related conditions and cardiovascular diseases are significant markets for medical device outsourcing, with a growing focus on IVD, Ophthalmic, and other therapeutic areas. The market is driven by the increasing prevalence of chronic diseases, technological advancements, and the need for cost-effective solutions.

Market Research Overview

The Medical Device Manufacturing Outsourcing market encompasses various medical specialties, including Oncology, Cardiovascular devices (Coronary stents), Orthopedic devices, Wound care, and Diagnostic Imaging. Outsourcing services cover scientific innovation, quality assurance, regulatory affairs, product implementation, upgrade, and maintenance. Contract manufacturing services include finished goods assembly, electronics, sensors, and procurement of polymers and electronic components. Medical practitioners in fields like General & plastic surgery, Ophthalmic, IVD, Dental, Endoscopy, Diabetes care, and Cardiovascular devices increasingly outsource non-core services to focus on their core competencies. This trend is driven by the need for modern technology, productivity, and time-to-market advantages. Key services include IT outsourcing for quality control, logistics, and supply chain management. Security and privacy, data confidentiality, product quality, and intellectual property protection are crucial concerns. The contract manufacturing segment leverages state-of-the-art equipment to deliver high-quality products while addressing age-related conditions, cardiovascular diseases, orthopaedic issues, neurological disorders, and cardiac disorders.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Product
• EMS
• Raw Materials
• Finished Goods
• Medical Device Regulatory Classification
• Class II
• Class III
• Class I
• Geography
• North America
• Asia
• Europe
• Rest Of World (ROW)

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

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SOURCE Technavio