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Electronics Production | October 01, 2007

OEM contract manufacturing to<br>grow $11 billion by 2011

The next few years are expected to be lucrative ones for OEMs and contract manufacturer companies processing raw materials for medical device companies- especially in niche areas and among OEMs that offer flexibility to move with market changes.
The materials processing area of contract manufacturing for device manufacturing will grow from $13.9 billion globally to $25.41 billion by 2011, according to OEM Contract Manufacturing in Medical Devices, Volume I: Materials Processing, a new report by Kalorama Information.

The trend towards the incorporation of outsourced technologies will be particularly prevalent in product areas where biocompatibility is required for the fusion between biotechnology, chemistry, and medical device technologies. OEMs whose core competencies lie in only one of these areas
will require expert input in the other areas that are complementary.

Future growth in the medical devices/drugs fusion industry is likely to come in orthopedics and implants as well as in the cardiovascular devices sector, where issues relating to biocompatibility, anti-microbial sterilization, device coatings, and drug release mean that specialist contract manufacturers are likely to be in increasing demand.

"The medical device industry today is similar to the electronics industry 20 years ago, when around 20% of the cost of manufacturing was outsourced," said Steven Heffner, publisher of Kalorama Information. "That number has now elevated to an estimated 90%. In the medical device industry across the mainstream nine market segments, the level of outsourcing of manufacturing costs is currently around 30%, so there is considerable room for growth and manufacturing efficiencies to be gained during the next five to ten years."

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