Diagnostic Contract Manufacturing Market

The global diagnostic contract manufacturing market in terms of revenue was estimated to be worth $26.0 billion in 2023 and is poised to reach $44.9 billion by 2028, growing at a CAGR of 11.5% from 2023 to 2028. The new research study consists of an industry trend analysis of the market. The new research study consists of industry trends, pricing analysis, patent analysis, conference and webinar materials, key stakeholders, and buying behaviour in the market.

The growth in this market is attributed to the rising number of diagnostic public-private partnerships, and government grants will increase the use of medical devices in emerging countries, leading to a boom in contract manufacturing. On the other hand, a lack of constant innovation to balance technological capabilities against cost may challenge the growth of the diagnostic contract manufacturing market.

Attractive Opportunities in the Diagnostic contract manufacturing Industry

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Global Diagnostic contract manufacturing Dynamics

DRIVER: High cost of in-house IVD manufacturing

Contract manufacturing services in the IVD field have gained significant adoption as companies seek to expand their customer base by providing competitively priced products. Many CMOs are emerging in the Asia Pacific region, providing enormous opportunities for OEMs in IVD. According to a report by the Medical Device Outsourcing Association (MDOA), over 70% of medical device companies considered outsourcing in 2021. Thus, the high cost associated with the in-house manufacturing of IVD products has opened the doors to outsourcing manufacturing.

RESTRAINT: IP protection concerns and the possibility of IP theft

Diagnostic contract manufacturing includes outsourcing the production of the devices like IVD equipment, diagnostic imaging devices, and other devices to third-party manufacturers. OEM shares sensitive and proprietary information with contract manufacturers about diagnostic devices' design, technology, and manufacturing process. And with this exchange of sensitive information, data security becomes crucial.

OPPORTUNITY: Growth opportunities in emerging countries

Developing economies such as India, China, Brazil, South Korea, Turkey, Russia, and South Africa offer high growth opportunities for major players in the diagnostic contract manufacturing market. Furthermore, emerging economies offer lower manufacturing costs. For instance, outsourcing to China would reduce the overall manufacturing cost by ~30% compared to manufacturing in the US.

CHALLENGE: Adoption of refurbished diagnostic imaging systems

due to the strong demand for diagnostic imaging procedures globally, hospitals that cannot afford to invest in new imaging systems opt for refurbished ones. This is because refurbished systems are priced lower than new systems (40% to 60% of the price of new equipment). Many independent suppliers provide high-end refurbished and re-used systems at a significantly lower price.

Diagnostic Contract Manufacturing Industry Ecosystem

Prominent companies in this market include well-established, financially stable players in diagnostic contract manufacturing. These companies have been operating in the market for several years and possess a diversified product portfolio, state-of-the-art technologies, and strong global sales and marketing networks. Prominent companies in this market include Jabil Inc. (US), Flex Ltd. (Singapore), Plexus Corp (US), Sanmina Corporation (US), TE Connectivity Ltd. (Switzerland), and Celestica Inc. (Canada).

In 2022, In Vitro Diagnostic devices to observe the highest share of the diagnostic contract manufacturing industry, by product.

Based on the devices, the global diagnostic contract manufacturing market is broadly segmented into In vitro diagnostic devices, diagnostic imaging devices, and other devices. IVD equipment and devices are used to conduct laboratory tests to diagnose diseases and medical conditions and monitor patient status. IVD devices observe the highest market share during the forecast period. The high growth rate can be attributed to the increased adoption of automated diagnostic tools. 

In 2022, device development and manufacturing services segment to dominate the diagnostic devices industry, by service.

Based on service, the diagnostic contract manufacturing market is segmented into device development and manufacturing services, quality management services, packaging and assembly services, and other services. Diagnostic device makers are currently under intense pressure to bring new devices to market faster and lower production costs. As a result, medical device manufacturing service providers continually evolve their services and find new ways to make production more efficient.

In 2022, North America to hold second largest in diagnostic contract manufacturing industry after Asia Pacific.

The global diagnostic contract manufacturing market is segmented into North America, Europe, Asia Pacific, and Rest of the World. North America is expected to observe significant growth during the forecast period, primarily due to the presence of a large number of diagnostic contract manufacturing companies in the region and improved industrial and healthcare infrastructure. The region also offers technological advancements in diagnostic devices, offering innovative solutions to their OEM partners.

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The diagnostic contract manufacturing market is dominated by players such as Jabil Inc. (US), Flex Ltd. (Singapore), Plexus Corp (US), Sanmina Corporation (US), TE Connectivity Ltd. (Switzerland), and Celestica Inc. (Canada).

Scope of the Diagnostics Contract Manufacturing Industry

This research report categorizes the Diagnostic contract manufacturing market to forecast revenue and analyze trends in each of the following submarkets:

By Region

• North America
• Europe
• Asia Pacific
• Rest of the World

By Product

• In Vitro Diagnostic Devices
  • IVD Consumables
  • IVD Equipment
• Diagnostic Imaging Devices
  • CT
  • X-ray
  • Ultrasound
  • MRI
  • Others
• Other Devices

By Service

• Device Development and Manufacturing Services
• Quality Management Services
• Packaging and Assembly Services
• Other Services

By Application

• In Vitro Diagnostic Devices
  • Infectious Diseases
  • Diabetes
  • Oncology
  • Cardiology
  • Other Applications
• Diagnostic Imaging Devices
  • Cardiology
  • Oncology
  • Orthopedics
  • Neurology
  • Other Applications
• Other Devices
  • Gastroenterology
  • Gynecology
  • Other Applications

Recent Developments of Diagnostic Contract Manufacturing Industry:

• In 2022, IdentifySensors Biologics partnered with Jabil Inc. to develop processes for the reliable and robust manufacturing of portable devices that rapidly detect a wide range of infections at the molecular level with an accuracy that is superior to PCR testing.
• In 2022, Plexus Corp. expanded its manufacturing facility in Bangkok, Thailand.
• In 2021, TE Connectivity (US) acquired three companies focused on microfluidic cartridge and blister reagent package development, usability testing, and clinical research and manufacturing.
• In 2020, Sanmina Corporation achieved the Medical Device Single Audit Program (MDSAP) Certification at facilities in Malaysia, Singapore, and Sweden. The certification ensures its compliance with quality practices and audits.

Frequently Asked Questions (FAQ):

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