NEW YORK -- Revenues from outsourced medical electronics manufacturing reached $16.56 billion in 2012 and are expected to grow 11% compounded annually through 2019, a research firm says.

While end-market sales are buoyed by increased use of wireless communications, robotics, and software, Frost and Sullivan said, medical OEMs are under pressure to drop prices, keep up with research and development, and tighten product portfolios.

The industry is witnessing rapid growth and demand in the remote diagnostics, patient monitoring, cardiovascular, neurology, consumer medical products, single use products, and other medical products.

As with other industries, outsourcing the manufacturing end can help medical OEMs focus on their end-product design and lower their fixed costs. Healthcare changes in the US and additional excise taxes are expected to drive short-term EMS growth, Frost said.

Frost sees opportunities both for traditional contract electronics manufacturing services and for developing and building medical grade plastics and single use devices. The markets are converging due to increasing overlap between the two areas of outsourcing, Frost said, adding that while few EMS companies currently offer medical grade plastics, the trend to do so will increase gradually over the next decade.

All figures rounded. The base year is 2012. Source: Frost & Sullivan.

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