Medical Electronics Is Not so Niche Anymore: A primer on the surging sector

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medicalThis article will explore the growth areas in medical electronics through the components and technologies driving the near- and mid-term adoptions as supported by economic and market developments.  

 

 


"The medical electronics market is estimated to be valued at US$128.6 billion for this year, and it is expected to reach a market size of about US$191.1 billion by 2015, resulting in a growth rate of 8 percent over the next five years." (cf. DataBeans 2010 Medical Semiconductors report).  Most analysts agree that medical electronics is experiencing steady growth, due to both technological advances and the aging of the world's population.  As a result, double digit growth is forecasted across medical electronics' four major subsectors:  consumer medical devices; diagnostic, patient monitoring and therapy; medical imaging; and medical instrumentation. (cf. EETimes Virtual Conference: Medical Systems Design, keynote address by Doug Rasor). 

The next frontier and challenge
The market composition for medical is seeing a critical set of variables align and provide momentum for the quicker adoption of higher numbers of medical electronics devices.  These variables include the following, which help frame the trajectory of this growth:

  • global healthcare spend is estimated at over US$5 trillion annually and increasing due to aging populations and demands from emerging market populations;
  • "for 2010, the medical segment is expected to represent almost 10 percent of the US$29.7 billion global industrial semiconductor market, or US$2.9 billion. Medical electronics is the fastest growing segment in the industrial semiconductor market, with an average growth rate of 10 percent per year." (DataBeans 2010 Medical Semiconductors report); 
  • remote patient monitoring is forecasted to grow at a 77% compound annual growth rate (CAGR), reaching roughly US$950 million in revenue by 2014 (cf. ABIresearch report here);
  • wireless healthcare and services are forecasted to grow from US$2.7 billion in 2007 to US$9.6 billion in 2012 (cf., The Economist, subscription required);
  • consumer medical devices spend is roughly US$1 billion with a 12% compound annual growth rate (CAGR) (cf. EETimes Virtual Conference: Medical Systems Design, keynote address by Doug Rasor), inclusive of the health and fitness market for monitoring workouts and conditioning programs (but not inclusive of the fitness gaming subsector, such as offered by devices like Nintendo's WiiFit);
  • increases in adoption by hospitals of medical electronics devices for invasive and non-invasive procedures (e.g., diagnostics, imaging, treatment delivery, device implants, pharma-technologies), and on-site as well as remote monitoring of patients;
  • among other new medical sector opportunities for the semiconductor and electronics industry, such as nanosensors and nano-scale biotechnology still in research and development (R&D) phases. 

Analysts across the board, from the World Health Organization (WHO) and the Organization for Economic Co-operation and Development (OECD) to the electronics industry and Wall Street, agree on the robust opportunity and need for more medical electronics to meet the world's health needs at reasonable cost levels. 

It is neither the need (demand) nor the technology (supply) that is really lacking at this point.  As a result, we see the final barriers to adoption subsiding from both the device side (i.e., cost, size, power/battery life, and standards for RF and data transfer), and from the acceptance of biotech devices by consumers (i.e., patients, technicians, doctors and hospitals).

The momentum has, therefore, now turned from restrained growth to the rapid adoption of medical electronics.  Critical among these variables are the following:

  • Demand:
    • solutions to meeting (costly) patient needs due to demographic pressures (aging populations worldwide)
    • increased need for access to remote population areas and in-home health care (non-hospital or physician center care)
    • availability of disposable medical electronic devices (based on ultra-low cost components)
    • static to growing rates of diseases and chronic conditions (e.g., diabetes, glaucoma, epilepsy, cardiac arrhythmia, chronic pain, paralysis, etc.) aided by medical electronics (e.g., drug pumps, implants, monitors, early detection, among others)
  • Supply:
    • lowered costs, smaller footprints and improved features in medical electronic devices (Moore's Law);
    • increased number of ultra-low-cost, therefore disposable, medical  electronic devices for emerging economies and rural areas;
    • increased support and standards adoption (e.g., Bluetooth, Bluetooth Low Energy, Zigbee) for remote patient monitoring and transfer of (wireless) medical data.

Moore's Law meets medicine: Understanding the components driving the trend
Many exciting engineering and technology advances are pushing the medical electronics envelope as researchers have pushed the capabilities of components to new levels and improved the compatibility and interactivity down to the chip level.  Specifically, there are four main challenges that have faced medical electronics, each of which has experienced significant advances to break through to a real market opportunity, further lowering barriers to entry to this market (ordered in weighted value):

  1. Power management
  2. Smaller size with increased features/capabilities
  3. Reduced cost
  4. RF signal improvements and data encryption standards

For many reasons power management should be understood as a critical driving force behind many advances in medical electronics.  The demands of medical electronic devices are such that significant improvements to common power management were and continue to be needed.  The main reason for this concern with power management include the longevity and reliability of the device, amount of heat dissipation, and weight and size restrictions prohibiting common power solutions.  In response, innovative alternatives have pushed medical electronics past the necessary thresholds for adoption. 
Some of the solutions and advances that have opened the floodgates for medical electronics include, but are not limited to, the following subdivided according to the above four challenges:

  1. Power Management:
  • Increased sophistication of analog components that reduce power consumption by up to 20%, offer 40% lower noise, and occupy 40% less board space (cf. Embedded Design India , free subscription required).
  • New advances in lower-power, multi-gate array, system-on-chip (SoC) FPGAs (over ASICs and ASSPs) that improve power management, speed, interconnectivity, all with lowered cost (cf. ElectronicsWeekly here and here).
  • Improvements in low-energy remote connectivity (e.g., Bluetooth Low Energy, Zigbee, and related technologies for wireless protocols and RF chips).
  • Dynamic power path management (DPPM) features to allow for immediate-on  capabilities during battery recharging based on independent power draw capabilities (cf. Planet Analog ).
  • Impedance tracking for improved battery lifespan/runtime tracking (cf. Planet Analog ).
  • More embedded processors, increased system-on-chip (SoC) solutions, and more integrated devices to decrease power dissipation (cf. Planet Analog ).
  • Improved component integration, especially analog signal chain (cf. Embedded Design India, free subscription Required).
  1. Smaller size with increased features:
  • Package-on-Package (PoP) techniques (i.e., vertical component stacking to reduce circuitry and board space) (cf. ElectronicsWeekly ).
  • Reduced board space through smaller architectures (presently at 32nm), stacking and 3D techniques, and integration with multiple applications (ports) for increased processing speeds with improved signal integrity and more feature support (cf. ElectronicsWeekly ).
  • Backside illuminated CMOS image sensors for dramatically improved pixel quality (cf. ElectronicsWeekly ).
  • Piezoresistive MEMS (cf. EETimes ),  as well as MEMS integrated with SoCs for all-around improved performance (e.g., lower power consumption, elimination of trimming, increased temperature tolerance, and linearity) (cf. EETimes ).
  • Low-cost, small footprint, wireless body monitors for non-intrusive physiological monitoring (e.g., via sub-threshold CMOS analog chains with each chip capable of handling multiple sensor inputs) (cf. ElectronicsWeekly ).
  • On the diagnostic side, nano-scale biotechnology is showing promise in R&D phases for spectroscopic imaging and treatment at the cellular level (cf. EETimes ).
  1. Reduced cost:
  • "Healthcare represents the most attractive market for WiFi equipment vendors" based on 77% CAGR estimates over the next few years for wireless medical electronic devices (cf. ABI Research and EETimes ).
  • GPS combined with body monitoring  is widening the number of consumer medical electronic devices for sport, health and fitness subsectors, improving economies of scale, competitive landscape, and on the end-user side, increasing the social acceptance of and familiarity with these types of devices (cf. ABI Research ).
  • Increased availability and adoption of wireless disease management devices (e.g., glucose monitors, blood pressure and pulse, temperature, remote reporting, portable ultrasounds (size of a smartphone), etc.) (cf. ABI Research and EETimes ).
  • Peripheral-circuit requirements across portable electronic devices are increasing in similarity, allowing for cost reductions due to the commoditization of the components (cf. Planet Analog ).
  • Increased use of analog-circuit design and interfaces to meet the demands for cheaper medical instruments (cf. EETimes ).
  • System-on-Chip (SoC) approach to MCUs (e.g., integrated measurement engines for a variety of diagnostic and therapeutic devices)  (cf. EETimes ).
  • Improvements in standards and device interconnectivity to increase the scale of use and consumer medical device field such as the improvements in and rise in adoption of FPGAs (cf. ElectronicsWeekly here and here).
  1. RF signal improvements and data encryption standards:
  • "Wireless standards are currently being discussed for wireless personal area networks (WPANs) [such as those used in body monitoring devices] as part of the IEEE802.15.6 working group." (cf. ElectronicsWeekly ).
  • IEEE 11073 standards for compatible exchange of information between health devices (cf. ElectronicsWeekly ).
  • Continua Health Alliance standards for medical data transport (cf. here and more specific advances here).
  • The signal and RF chip improvements plus medical data standards have opened new solutions to alleviate increased health cost burdens while improving the quality of patient experiences by not having to spend time in hospitals or clinics for extended monitoring periods.

Importantly, the increased entry of competition in the medical electronics sector has been a critical variable in the reduction in cost of components and devices for medical use, as well as the increased rate of innovation.  Much as automotive electronics was the governance of a few big players, so has been the market landscape for medical electronics.  All of the above bulleted variables have opened not only opportunities for new solutions and engineering advances, but for new markets to new competitors.  Additionally, larger OEMs continue to diversify their market positions and use their rich cash reserve, post global recession, to acquire smaller medical electronics companies and/or to invest in their medical device portfolio. (cf. EETimes )

Medical electronics opportunities abound today and for tomorrow
As the details above underscore, there is considerable movement happening in the medical electronics sectors.  This movement spans all aspects of the medical market in terms of diversity of components; exciting new engineering and architecting for chip-level improvements for sensors, analog, and RF; and increased adoption and acceptance of medical electronic devices by end-users (hospitals, doctors and patients). 

Developments on the macro-economic scene are similarly pushing open the floodgates for the adoption of medical electronic devices.  These macro-level developments include: health care reform in the United States (still a leading center for medical electronics R&D and manufacturing as well as an end-market), increased cost of health care globally, demand for reduced costs by hospitals and clinics, and increased weight on preventative and early diagnostic care. 

Socially, the increased number of adults caring for aging family members due to the aging worldwide population is demanding more remote monitoring, increased home care, improved connectivity for medical data transfer (from patient to doctor and between doctors and laboratories), and reduced time and costs for routine health maintenance. 

Finally, the interest in and commoditization of body monitoring devices for sports, health, and fitness have increased the social and behavioral adoption of medical electronics as these devices have become more widely recognized and familiar, as well as less expensive due to wider use for the core components.

In short, there is tremendous growth forecasted for the medical electronics sector.  The timing is now and the future is long and positive with well-supported legislative and economic conditions to remove many of the final barriers to adoption. 

Perhaps the most exciting outcome, beyond the healthy growth and revenue numbers, is the tremendous wider impact that the component advances are having on the semiconductor industry itself.  This positive forecast is also spurring renewed growth and advances in analog, a critical component to the technological solutions necessary to support the upcoming medical electronics devices (cf. the Sector Brief article in this issue of MarketWatch Quarterly, Sector Brief: Analog's changing marketplace).

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