The Medical Market for Cable Assemblies: Critical Care for a Critical Industry
By David Pheteplace, Bishop & Associates Inc.

Worldwide, a number of issues will affect the medical cable assembly market in 2010 and beyond. Some of these issues are continuations of trends, and others are new trends that are just starting to gain recognition. Here are a few of these factors.

The global population is aging, particularly in most westernized countries. In the U.S., approximately 40 million Americans will be 65 or older in 2010, and nearly 54 million will be by 2020. In 2010, 10 percent of China’s population, over 130 million people, will be over 65, rising to 210 million in 2020. The European Union will have approximately 90 million people over 65 in 2010, and Japan, with the highest percentage of elderly, at over 22 percent, will have over 28 million. Many chronic conditions can affect people as they age. Treating these individuals will require expanding healthcare systems and their capabilities in all countries.

The U.S. began the complicated process of reforming its healthcare system in 2009. Although the Senate and House each passed separate bills, the shape the final legislation will take remains up in the air. Much of the bill’s content, however, is aimed at the health insurance and pharmaceutical industries, so it is not likely to have a direct effect on the medical devices industry. If healthcare is made more accessible to more people, however, the side effect will be a need for increased capacity in the system, which will call for more infrastructure and equipment purchases.

In early 2009, China committed $125 billion over the next three years to improve their healthcare system. As China begins the reform process, there will be significant opportunities for the medical device industry, as China needs to greatly expand their capacity and infrastructure, which has severely lagged behind the needs of their large population. This will include many new hospitals and the accompanying basic tools, such as surgical equipment, x-ray machines, MRI equipment, and monitoring devices. This will all create more opportunities for medical cable assemblies.

India, with the second largest population in the world, will probably offer similar opportunities, as the country becomes more prosperous and healthcare services are brought to more of the general population.

Technology advances in equipment will also drive growth in the medical cable assembly market. Advances improving the diagnostics and speed of services have been significant over the last 10 years. One example is GE’s Discovery NM 530C, a cadmium zinc telluride-based nuclear cardiac scanner. This new machine (right) can do a cardiac scan in just five minutes. Conventional machines would require two scans, taking 15-20 minutes each. Thus, the patients’ diagnosis is timelier (in a usually time-critical situation) and the machine is available to more patients.

Another trend just starting to emerge in the medical device industry is the regionalization of manufacturing. Many medical device companies, whether from North America, Europe, or Japan, have resisted moving their manufacturing off shore, but more will make the move in the years to come, and the cable assembly business will move along with the device manufacturing. Like the electronics industry in general, much of the standardized and disposable assemblies, such as probe assemblies for ultrasound machines and the hook-up assemblies for EKG monitoring, are already coming from low-cost manufacturing areas such as China.

The biggest question mark for 2010 is the world economy. Most Western countries are expected to have GDP growth in the one- to three-percent range. China’s will probably be higher, over eight percent, but it may ultimately be hampered by their recent move to tighten credit.

Bishop & Associates expects the worldwide market for medical cable assemblies to grow by approximately 15 percent in 2010, to $2.9 billion. The above factors should also drive good growth for this industry for the foreseeable future.