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 boost the market, AI Role and Impact, Technavio

NEW YORK, Aug. 22, 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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Market Driver

The medical device manufacturing outsourcing market is characterized by a high level of competition among numerous global, regional, and local players. To gain an advantage through inorganic growth, companies are actively engaging in mergers and acquisitions (M&A). The M&A activity in this market is robust, with a significant number of transactions taking place recently. Buyers use M&A as a key marketing strategy to expand their product offerings, enter new markets, and consolidate their businesses. This approach has led to increased inorganic growth, particularly for larger players. Major companies view the medical device industry as an attractive growth sector and are pursuing acquisition strategies to boost market share. These acquisitions also facilitate technological advancements among vendors. Companies employ M&A strategies with long-term goals to expand into new markets. For instance, in September 2022, Eurofins Scientific SE acquired Inpac Medizintechnik GmbH, a German firm specializing in cleaning, packaging, and sterilization services for the medical devices, biotech, and pharma industries. Similarly, Eurofins Scientific SE completed the acquisition of WESSLING Hungary in July 2022, extending its presence in the food, environment, and pharmaceutical testing market. These factors will fuel the growth of the medical device manufacturing outsourcing market during the forecast period. 

The Medical Device Manufacturing Outsourcing market is experiencing significant growth, particularly in sectors like Oncology, Coronary stents, Wound care, and Orthopedic devices. Companies are focusing on scientific innovation to meet the increasing demand for advanced medical devices. Quality assurance services, regulatory affairs, product implementation, upgrade, maintenance, and contract manufacturing are key areas of outsourcing. Diagnostic Imaging, Orthopedic, IVD, Ophthalmic, General & Plastic Surgery, Drug Delivery, Dental, Endoscopy, Diabetes care, Cardiovascular devices, and Cosmetic surgeries are major sectors driving outsourcing. Medical practitioners require finished goods with electronic components, sensors, and polymers for patient care. Age-related conditions, cardiovascular diseases, orthopaedic issues, neurological disorders, and cardiac disorders are major patient epidemiology trends. IT outsourcing is crucial for productivity, with quality control, logistics, and testing being essential services. Procurement of raw materials and device production are also outsourced. The market encompasses various sectors, including electronics assembly, packaging, and product maintenance. The future of medical device manufacturing outsourcing lies in continuous innovation and adherence to regulatory standards. 

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Market Challenges

• Medical device manufacturing outsourcing by Original Equipment Manufacturers (OEMs) is subject to rigorous regulatory compliance. For devices manufactured overseas, each country has specific regulations for medical products. The US Food and Drug Administration (FDA) and the European Commission have implemented stringent guidelines for quality control and environmental requirements. The FDA’s 510(k) process for approving certain medical devices has faced scrutiny, with Class III devices taking longer approval times in the US. Adherence to regulations includes testing, quality control, and documentation procedures. Continuous regulatory reviews and inspections, along with product field monitoring, ensure compliance. Non-compliance can significantly impact business operations. Strict regulatory guidelines pose a significant challenge to the global medical device manufacturing outsourcing market.
• The Medical Device Manufacturing Outsourcing market encompasses various sectors including general and 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. In sectors like cosmetic surgeries, physical appearance plays a significant role, necessitating high product quality. Procurement of electronic components, sensors, and polymers is crucial. Medical practitioners require finished goods on time for patient care. IT outsourcing brings in quality control, logistics, and productivity improvements. Security and privacy, data confidentiality, and intellectual property protection are vital concerns. The contract manufacturing segment offers solutions through advanced technology and adherence to medical device quality standards. Despite these advantages, challenges persist in areas like patient epidemiology, testing, age-related conditions, cardiovascular diseases, orthopaedic issues, neurological disorders, and cardiac disorders. Effective supply chain management, adherence to regulatory requirements, and maintaining product quality are essential.

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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

Medical Device Regulatory Classification 

• 2.1 Class II
• 2.2 Class III
• 2.3 Class I

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 sector is experiencing significant growth, driven by 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 expected to expand due to rising healthcare expenditures, the high growth potential in emerging economies like India, China, and Brazil, and rapid advancements in medical device technologies. OEMs are under pressure to reduce costs and focus on growth strategies, leading them to outsource design and production to EMS providers. Robotics, wireless products, and advanced medical software are driving the demand for EMS in the healthcare industry. EMS providers offer cost savings, increased quality, innovation, and efficiency, enabling OEMs to bring new products to market faster and manage their supply chains effectively. Cost pressures and the need to generate profits in low-to-medium volume manufacturing are key drivers for OEM outsourcing. In the US, the Affordable Care Act is expected to boost EMS provider growth by increasing outsourcing to offset additional cost burdens on OEMs. EMS providers can also help upgrade older designs and enhance electronic designs within existing medical devices. These factors will fuel the growth of the medical device manufacturing outsourcing market during the forecast period.

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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. Scientific innovation is a significant driver in this market, leading to the development of advanced devices such as electronic components, sensors, and IVD. Quality assurance and regulatory affairs services are crucial to ensure compliance with industry standards and regulations. Product implementation, upgrade, maintenance, and contract manufacturing services enable OEMs to focus on core competencies while outsourcing production and assembly. Orthopedic devices, including joint replacements and spine implants, are major sectors in the market. Wound care, age-related conditions, and cardiovascular diseases are key application areas. Procurement of raw materials, such as polymers, and device production are essential aspects of the outsourcing process. The market caters to various medical specialties, including IVD, Ophthalmic, and Cardiovascular. The increasing prevalence of age-related conditions and cardiovascular diseases worldwide is driving demand for medical devices in these sectors. The market is expected to grow significantly due to these factors and the continuous advancements in technology.

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. Scientific innovation is a significant driver, with companies outsourcing services for Quality Assurance, Regulatory Affairs, Product Implementation, Upgrade, Maintenance, and Contract Manufacturing. Devices under this market include Surgical, Finished Goods, Electronics, Assembly, Packaging, and Electronic Components, incorporating sensors and polymers. Procurement, logistics, and IT outsourcing are essential non-core services. Medical practitioners across General & Plastic Surgery, Cosmetic Surgeries, Diabetes care, Dental, Endoscopy, Ophthalmic, IVD, Drug Delivery, and Cardiovascular diseases require these devices. Modern technology and state-of-the-art equipment ensure product quality, productivity, and time-to-market. Outsourcing also addresses age-related conditions, neurological disorders, and cardiac disorders. Security and privacy, data confidentiality, intellectual property protection, and supply chain management are critical considerations. The Contract Manufacturing segment leverages advanced technology to deliver high-quality devices while maintaining regulatory compliance.

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.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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