The Asia Pacific medical
device outsourced manufacturing market is mainly driven by the overall growth
of the medical devices market, mainly due to the rising disease prevalence,
life expectancy, and geriatric population. Technological advancements have
prompted end users to overhaul or update their manufacturing systems. As this
is a costly process, they look to outsource contract manufacturing.
The Asia Pacific Medical device outsourced manufacturing market is projected to reach USD 56.2 billion by 2026 from USD 29.3 billion in 2021 and is expected to grow at a CAGR of 13.9% during the forecast period.
However, market growth is
impeded by the growing consolidation in the medical devices market. To develop
their own manufacturing capabilities and save costs, Larger players are
focusing on acquiring smaller players and CMOs themselves. This may affect the
overall market growth to a certain extent.
The prominent players in
the APAC medical device outsourced manufacturing industry are Flex, Ltd.
(Singapore), Jabil, Inc. (US), TE Connectivity, Ltd. (Switzerland), Sanmina
Corporation (US), Nipro Corporation (Japan), Celestica International (Canada),
Plexus Corporation (US), Benchmark Electronics, Inc. (US), Integer Holdings
Corporation (US), Gerresheimer Ag (Germany), West Pharmaceutical Services, Inc.
(US), Nortech Systems, Inc. (US), Consort Medical PLC (UK), Kimball Electronics
Inc. (US), and Teleflex Incorporated (US), Nordson Corporation (US), Tecomet, Inc.
(US), SMC Ltd. (US), Nemera (France), and Tessy Plastics Corporation (US),
among others. These players have adopted various growth strategies such as
acquisition, product launches, and expansion to increase their presence and
reach in the APAC medical device outsourced manufacturing market.
Jabil, Inc.: The company is a leading player in the market.
The company offers a focused range of products and services in the healthcare
domain as well as advanced manufacturing technologies. This factor, coupled
with its robust presence of manufacturing facilities worldwide, further adds to
its value. The company also serves some of the top companies in other domains,
which strengthens its brand recognition. Jabil also focuses on collaborating
with major pharma and medical device companies for contract manufacturing. In
2018, for instance, the company collaborated with Johnson & Johnson to
manufacture medical devices. Through its R&D efforts, the company offers
its customers highly automated, continuous flow manufacturing process
technologies for precise and aesthetic mechanical components and system
assembly. It invested USD 38.5 million, USD 42.9 million, and USD 44.1 million
in 2018, 2019, and 2020, respectively.
COVID-19 Impact: The COVID-19 pandemic increased the company’s
expenses, primarily related to additional labour costs and the procurement of
personal protection equipment for its employees globally. The pandemic also
reduced the company’s factory utilization due to travel disruptions and
restrictions.
Public- and private-sector policies and initiatives to reduce
the transmission of COVID-19, including travel restrictions and quarantines,
impacted the company’s operations. This affected its employees’ ability to get
to the company’s facilities, thereby reducing capacity utilization levels,
causing certain facility or intermittent business closures, and interrupting
the movement or increasing the cost of moving components and products through
its supply chain. Moreover, travel and business operation restrictions arising
from virus containment efforts worldwide also impacted Jabil’s operations in
Asia, Europe, and the Americas.
Flex Ltd.: The company provides design, engineering,
manufacturing, and supply chain services and solutions to original equipment
manufacturers worldwide. The company is contracted by some of the major players
in the electronics industry. Its expertise in the electronics segment has given
the firm an advantage in the medical devices segment. The company has vast
operations globally, with 40 manufacturing sites located across the globe. Although
the medical devices segment is not its core business, expertise from the
electronics market will surely help the company develop innovative products and
solutions in the future.
The company focuses on
agreements and partnerships to strengthen its service portfolio in the medical
devices and other healthcare segments. In October 2018, Flex partnered with
Novo Nordisk (Denmark) to develop digital health solutions for diabetes
patients. Flex continues to make substantial investments in resources such as research
& development, technology licensing, test and tooling equipment, facility
expansions, and personnel requirements to create world-class components. Each
year, it invests a considerable share of its revenue in the research &
development of products to maintain its position in the market.
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Sanmina Corporation: The company has established itself as a global
player with a strong presence in almost 40 countries worldwide. The company
focuses on technological advancements by offering diverse electronic medical
devices as well as custom medical devices. The company follows changing trends
like Industry 4.0 by focusing on automation and cloud-based functioning in its
operations. Sanmina also caters to a host of other market segments apart from
medical device manufacturing. The company’s R&D expenses were USD 22.6 million,
USD 27.6 million, and USD 30.8 million in 2020, 2019, and 2018, respectively.
As a percentage of its net sales, the company’s R&D expenses were 0.3%,
0.3%, and 0.4% in 2020, 2019, and 2018, respectively.