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Electronics Production | February 04, 2008

The EMS industry is craving<br>for Medical equipment

The medical segment is coming very strong among the big EMS companies which see this segment as a profitable segment thus margins are higher than with other consumer electronics.

The EMS industry is expected to grow 12% per year until year 2010. Computers and communications equipment will continue the biggest segments for the Top 50 EMS companies over the next four years with approximately 66% of the total value of the EMS market. But the medical segment is coming very strong among the big EMS companies which sees this segment as a profitable segment thus margins are higher than with other consumer electronics, according to Purchasing.com. A study from iSupply said the medical market will grow from 60 billion US dollar in 2005 to 87.4 billion US dollar in 2010. Today the EMS-market only has 4 per cent of that share. Technology Forecasters said the medical sector will grow with a 13 per cent rate over the next four years making medical the second fastest growing segment after communication (13,7 per cent). For example the Solectron part of Flextronics has during the last one and a half year invested in people and capacity for expanding the medical segment significantly. Sanmina-SCI is also putting a lot of effort into this segment with 7 per cent of its total revenue coming from the medical segment. Sanmina-SCI has eight plants globally dedicated to the medical industry. The company uses an FDA (Food and Drug Administration) quality and regulatory management organization similar to what medical OEMs are using, according to Purchasing.com. Another EMS company that has a strong focus in this area is Switzerland based Enics Group which communicates their heavy focus on the medical- and industrial segments. On the US market the FDA is auditing all companies that plans to deliver equipment to the medical industry, making it a challenging segment to get into. Medical equipment is also often built in the same country as it is sold in due to heavy weights, tax tariffs, and fear of copying intellectual properties in the far-east countries.
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