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Electronics Production | June 27, 2007

Big Opportunities for EMS in Medical

Opportunities for electronic manufacturing service (EMS) providers appear set to increase significantly as original equipment manufacturers (OEMs) of medical devices look for ways to reduce capital costs and time-to-market for new products.

The idea of outsourcing the entire manufacturing process to contract manufacturers has become increasingly more appealing to medical OEMs, as this enables them to focus on core business activities such as new product development and marketing. New analysis from Frost & Sullivan, EMS Provider Opportunities in the Medical Device Industry, reveals that the North American EMS medical device market earned revenues of $3.79 billion in 2006 and estimates this to reach $8.09 billion in 2013. Having realized the considerable potential of the medical EMS market, EMS providers have begun expanding their services to include the design and engineering phases of the production process. The number of service offerings from EMS providers has expanded to include product design, prototype building, testing, repair and warranty services. "Times have changed since EMS providers focused only on assembly manufacturing for OEMs," says Frost & Sullivan Research Analyst Julian Harris. "The 'design for' concept -- which includes design for assembly, testing, manufacturability, and supply chain -- is very viable and important to increase value for an OEM." Continuous growth in end-user applications within the medical device market will also create good outsourcing opportunities for EMS providers. For instance, cardiovascular devices and monitoring equipment will see a spurt in growth due to the widespread prevalence of cardiovascular disease and cancer. Minimally invasive surgery and the emerging neurostimulation segment will also contribute to the growth of EMS providers in the medical device market. Other potential high-growth areas include therapeutic devices, endoscopy, infusion systems, diagnostic and monitoring equipment, audiology, and instrumentation devices. While the future for EMS providers appears highly promising, stringent guidelines implemented by the Food & Drug Administration (FDA) pose a barrier to entering the medical device market. Adhering to FDA regulations and others such as ISO 13485 has become critical since medical OEMs often select EMS providers for their outsourcing needs based on their compliance with current regulatory standards. "Attaining regulatory compliance in the medical device market is extremely important for EMS providers to successfully enter it and increase penetration levels," says Harris. "Understanding the guidelines set by regulatory bodies will give EMS providers an edge when pitching for outsourcing contracts from medical OEMs." EMS Provider Opportunities in the Medical Device Industry is part of the Surface Mount Technology Growth Partnership Service, which also includes research in the following markets: LCD manufacturing, PCB manufacturing equipment, SMT placement equipment and chip bonders. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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