Driven by a series of government policies, revenue for China’s medical electronics industry is slated to nearly double in five years starting from 2011, according to the IHS iSuppli China Research service from information and analytics provider IHS.
China’s medical electronics industry is being negatively impacted by the weak global economic environment, especially in the export sector. However, a series of stimulus efforts is being carried out by the Chinese government this year, boosting domestic demand.
Revenue in 2011 from China’s medical electronics industry amounted to $4 billion, a 19.6 percent year-over-year expansion. IHS estimates that medical electronics’ revenues will reach $4.8 billion this year, a further 18.4 percent increase. With strong momentum generated by government policies, the market is expected to reach $7.4 billion by 2016, equivalent to a five-year compound annual growth rate of 13 percent.
The development of medicine and healthcare continues to be an area of great concern and investment from the Chinese government. Following the release of the 12th Five-Year Plan for the Medical Device & Equipment Industry by the Ministry of Science and Technology (MOST) in early 2012, a set of important medical policies was implemented during the first half of the year.
Another important document, China's 2020 Health Strategy Research Report, was released by the Ministry of Health (MOH) in August 2012. The report points out that the overall expenditure on China’s public hygiene is expected to account for 6.5 percent to 7 percent of China’s gross domestic product by 2020, which amounts to about $63.5 billion. Despite the uncertain economic situation, China’s government will continue increasing the subsidies for policy implementation.
Maintaining their overwhelming advantage in high-end products, Tier 1 medical electronics vendors have announced their strategies for China’s basic medical market. Responding to China’s 12th Five-Year Medical Plan, these companies plan to launch customized low-cost equipment targeting the second- and third-class cities.
Meanwhile, R&D investments among domestic firms are increasing. Leading domestic firms are changing their low-end positioning by introducing complex products in order to differentiate and enhance brand presence.
Promising consumer segment
The consumer medical device segment is always recognized as the most promising segment of China’s medical electronics market. Owing to the strong demand for personal healthcare monitoring, a variety of home-use portable medical devices has quickly become popular. IHS predicts revenue from consumer medical devices will rise to $1.1 billion in 2012, a 19 percent increase from the previous year.
Spending in this market will continue to rise over the next few years. In order to reduce the cost of treatment, the government also is taking a proactive approach to healthcare by promoting healthier lifestyles among citizens and increasing public awareness of health issues. Regular home healthcare monitoring is one way in which the public is encouraged to take more direct control of health.
Besides requirements for high performance and reliability, other important characteristics of consumer medical devices include portability, low cost and ease of use.
Chipmakers target consumer devices
Given that the semiconductor consumption of consumer medical devices is higher than that for other medical electronics segments, this area has become a target market for most IC suppliers. IHS forecasts that China’s consumer medical devices market will use up semiconductor devices valued at approximately $70 million in 2012, accounting for 28.5 percent of total consumption.
With portability becoming more important in medical products, manufacturers are seeking technologies to reduce design complexity and the time needed to develop finished products. As a result, solutions possessing high-integration capabilities are required.
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