Existing Equipment Still has Staying Power—Part 2
In Part 1 of this blog, we discussed disruptive technology as it pertains to the medical equipment market. Due to the high cost of leading-edge medical technology, sales are lagging for the most cutting-edge systems, such as hybrid x-rays, which combine radiology/cardiology interventional x-ray systems.
In fact, investment in high-value medical equipment overall has been lagging due to ongoing economic uncertainty. “With healthcare systems still reeling from widespread economic challenges, capital-intensive medical equipment markets like interventional X-ray have suffered,” market research firm IHS says. This means existing systems are going to have to last a little bit longer.
The medical equipment industry is facing a couple of challenges when it comes to extending the lifespan of equipment. The EU’s Restriction on Hazardous Substances (RoHS), which bans certain materials such as lead and mercury in electronics, now applies to medical equipment. We discussed those implications in Part 1. Second, the components that make up the high-tech part of medical electronics may go out of production as component makers transition their manufacturing capacity to newer products. This process, called end-of-life (EOL), means there could be a finite quantity of key devices.
Original component makers (OCMs) often make EOL parts available for sale. Many marquee names—Intel, AMD, Atmel, Freescale, NXP, and National Semiconductor/Texas Instruments—partner with distributors that will store and maintain these parts per OCM specifications. Rochester Electronics has been a partner of many of these companies for a decade or more.
OCMs may also make the tools necessary to manufacture these devices—the die, masks and IP—available to partners such as Rochester. This authorization means the parts produced by Rochester meet supplier specs exactly, and are supported by Rochester to the same degree as the OCM. If those tools are no longer available from suppliers, Rochester, through its Extension of Life solutions, has the ability to re-create devices to the same form, fit, function, and specs as the OCM part. Rochester can also make the part RoHS compliant even if that package option was not offered in the past.
Component makers increasingly are aligning themselves with partners such as Rochester so customers aren’t confronted with EOL dilemmas. Buyers can always look for devices on the Internet or in the open market, but run the risk of buying a substandard or counterfeit component. OCMs authorize partners such as Rochester Electronics to avoid this dilemma.
IHS is predicting that the move to hybrid x-ray systems will take a while. “Despite such cost and clinical outcome benefits, strong market demand relating to the hybrid OR has yet to materialize,” the researcher reports. “Key challenges include the expense of the hybrid OR in the current economic climate. While current market conditions continue to challenge suppliers to provide innovative cost-saving systems, the longer-term outlook for the interventional X-ray market looks far more positive.” When that happens, customers should look for equipment and component makers that have made plans for the possible obsolescence of spare parts.