Demographics Drive Medical Electronics Market

The cost to treat disease and aging worldwide continues to spur innovation in medical electronics as demand for portability and connectivity increases.

Two key factors stand out as growth drivers in the medical electronics market these days: our tendency to live longer and the demand among emerging economies for greater access to good health care. Both factors are contributing to greater demand for medical equipment that is smarter, faster, and portable.

The worldwide market for medical electronics is expected to grow steadily over the next five years. More than $3.8 billion worth of semiconductors was needed for healthcare applications in 2011, for example, making it the fourth major area of spending, according to industry analyst Jacobo Carrasco Heres of IHS iSuppli. The market should remain at that level through 2015, he explains, reaching $6.5 billion in 2017—a 9% compound annual growth rate from 2010 to 2017.

Analog integrated circuits (IC), microcontroller units (MCUs), and microprocessing units (MPUs) remain the top-selling semiconductor devices, Carrasco Heres adds. In particular, analog ICs are needed for imaging, consumer applications, and medical instruments, while MCUs are used for diagnostics, patient monitoring, and therapy, as well as medical instruments. MPUs find their way into imaging technology such as magnetic resonance imaging (MRI) systems.

The need for better, more sophisticated equipment and systems is driving manufacturers to create even more innovative products for use in both hospitals and at home. As a result, portability and communication/connectivity are two issues that are getting a lot of attention these days, Carrasco Heres adds.

“Examples \[include\] high growth rates of portable devices—for example, portable ultrasound—and ‘telehealth,’” the delivery of health-related services and information via telecommunications technology, Carrasco Heres explains, pointing to a resulting trend toward smaller semiconductor components and greater power efficiency as well as a drive for devices that include more communication ICs.

Mark Simon, vice president of sales for distributor Allied Electronics, agrees with the trend toward portability in particular. He says medical markets are a mixed bag this year, as hospitals and institutions struggle to get the capital they need to upgrade and enhance their facilities and technology.

Medical equipment makers focused on meeting consumer demand for portability are a much better bet, Simon adds—especially in U.S. markets, where the aging population seeks to be treated at home as opposed to in a hospital or nursing home facility. Indeed, Carrasco Heres notes that consumer medical devices are expected to see the highest growth rates in 2012. Blood glucose and blood pressure monitors rank first, followed by activity monitors, he says.

“This market is migrating toward higher-bit MCUs because of greater requirements, and \[it is\] also including more communication ICs (Logic ICs),” he says.

According to iSuppli, medical imaging is another hot market. Demand for this equipment is growing in Eastern Europe in particular, as new members of the European Union benefit from EU subsidies to build infrastructure. In addition, China and India represent high demand for portable imaging devices.

Medical instruments such as dialysis machines, endoscopes, and motorized patient beds also are strong sellers in this market, which represents high demand for motor drive ICs and intensive processing ICs such as MPUs and MCUs.

Diagnostics, patient monitoring, and therapy also represent good opportunities. Carrasco Heres points to greater demand for both low-end and high-end electrocardiograms (ECGs) and electroencephalograms (EEGs), noting that ECGs will dominate the category in 2013. He says implantable devices will see solid growth rates as well. Continuous positive airway pressure (CPAP) machines, ventilators, and nebulizers are increasingly using more semiconductor products, resulting in good growth opportunities as well.

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