AdvaMed, Deloitte study highlights need to prioritize semiconductor supply chain for medical technology, patients
September 24, 2021
WASHINGTON, D.C. – A new study commissioned by the Advanced Medical Technology Association (AdvaMed) found that two-thirds of medical technology companies say semiconductors, firmware, and/or embedded software are required for at least half of the medical devices they produce for patients.
AdvaMed President and CEO Scott Whitaker said: “This finding is of significant concern right now—which is why we need to address it before it becomes a crisis for patients down the road. While the chip shortage is a global, economy-wide problem, we’re not talking about waiting longer or paying more than expected for a new car or phone. We’re talking about insulin pumps for Type 1 diabetics, pacemakers, MRI machines, and so on—critical medical technologies for patients. We are working with the Administration, Congress, and the semiconductor industry to help ensure the medical technology’s supply chain is prioritized and protected so that patients can continue to access the lifesaving medical technologies their lives depend on.”
The study’s authors – Bill Murray and Stephen Bradley of Deloitte Consulting – released an analysis of their findings which can be found on AdvaMed’s “Medtech POV” blog by clicking here.
The study revealed several key findings, including:
Two thirds of the companies interviewed use semiconductors in at least 50% of their products.
Primary needs are second- and third-generation chips – meaning medtech is competing with the auto industry more than high-tech manufacturers.
More than 70% of respondents said more than half of their semiconductors are single source, raising the stakes for supply chain disruption.
Every respondent has experienced chip supply chain disruption ranging from two weeks to more than a year.
Most respondents have experienced additional supply chain disruptions that led to additional costs.
Whitaker recently sent a letter to U.S. Secretary Gina Raimondo laying out the industry’s concern about semiconductor availability for medical technology producers and asking that medtech be prioritized as the administration considers any policy to alleviate chip supply constraints. The medtech industry is doing its part to mitigate the risks by working more closely with suppliers and deepening partnerships to secure materials and components for the medical products they produce. AdvaMed is working to enhance visibility of this issue across the supply chain.
AdvaMed member companies produce the medical devices, diagnostic products and digital health technologies that are transforming health care through earlier disease detection, less invasive procedures and more effective treatments. AdvaMed members range from the largest to the smallest medical technology innovators and companies.