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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.
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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.
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.
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.
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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.
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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.
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.
In the current market landscape, there is substantial growth due to numerous factors. A major contributor to this expansion is original equipment manufacturers (OEMs) aiming to decrease manufacturing costs. With healthcare budgets being constrained worldwide, OEMs face the challenge of delivering top-notch healthcare services while minimizing expenses. To address this issue, many OEMs are opting for outsourcing as a cost-effective strategy. Outsourcing offers several advantages, including streamlined operations, reduced production costs, and optimized resource utilization, thereby increasing overall efficiency and market competitiveness.
Additionally, outsourcing manufacturing provides OEMs with the opportunity to collaborate with specialized contract manufacturers, particularly in domains such as product design, testing, sterilization, and maintenance. By teaming up with experienced contract manufacturers, OEMs can benefit from advanced manufacturing technologies, skilled labor, and efficient production processes, ultimately resulting in enhanced product quality and expedited 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.
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.
A stringent regulatory environment poses a significant challenge to the market expansion for OEMs in the medical device industry. Compliance with regulations is essential when outsourcing device manufacturing, particularly when production is moved overseas. Each country has unique regulations for medical products, and both the US Food and Drug Administration (FDA) and the European Commission have implemented rigorous regulations for outsourcing service providers regarding quality control and environmental requirements.
The US FDA's 510(k) process for clearing specific classes of medical devices has faced increased scrutiny. For instance, obtaining regulatory approval for Class III devices in the US takes longer than in other regions. Manufacturers must adhere to regulations, which include testing, quality control, and documentation procedures. Continuous compliance with regulatory authorities is subject to regular reviews, inspections, and product field monitoring. Failure to comply with regulations may negatively impact a company's business activities. Therefore, stringent regulatory guidelines pose a serious challenge to medical device manufacturing outsourcing market growth.
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
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:
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.
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 outsourcing market is thriving due to the rising demand for treatments in areas such as oncology, orthopedics, and central nervous system diseases. Contract manufacturing services play a vital role in producing devices like coronary stents, orthopedic implants, and diagnostic imaging tools for industries like IVD, ophthalmic, and wound care. These services encompass product design and development, testing, sterilization, and product implementation. Surgical devices and procurement processes heavily rely on advanced polymers and technology, addressing orthopedic issues and cardiac disorders.
IT outsourcing and business process outsourcing (BPO) optimize operations, while logistics ensure efficient delivery. Original equipment manufacturers (OEMs) collaborate with contract manufacturing organizations (CMOs), utilizing modern technology and advanced equipment. Data confidentiality and intellectual property protection are prioritized to safeguard security and privacy. In this complex landscape, maintaining medical device quality is crucial, shaping the future of healthcare. Scientific innovation drives product upgrades, maintenance, and testing services, enabling manufacturers to meet evolving industry standards and enhance device performance and patient outcomes.
Market Scope |
|
Report Coverage |
Details |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.87% |
Market Growth 2024-2028 |
USD 50.44 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
9.53 |
Regional analysis |
North America, Asia, Europe, and Rest of World (ROW) |
Performing market contribution |
North America at 37% |
Key countries |
US, China, Germany, 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, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Medical Device Regulatory Classification
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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