A severe lack of semiconductor chips was observed, which caused problems in the critical life-saving devices and Med-tech industry. The supply disruptions and uncertainty of chips internationally has increased the prices of specific essential life-saving devices. Stockout was observed in many places across the country.
Impact of the shortage
Due to the shortage, a new danger arises. It will threaten the availability of numerous chip-powered critical care and Intense Care Units [ICU] devices such as ventilators, defibrillators, imaging machines, glucose, ECG, blood pressure monitors and implantable pacemakers.
Overall prices are expected to grow by 20%, and it will have a terrible impact on the stocks. Medtech players have been talking about the effects of chip shortage on high-profile, consumer-driven sectors like automobiles and electronics.
Tension grows as already the lead time in manufacturing the chips has become 30-40 weeks, which was four-to-eight weeks earlier, and it has even reached 100 weeks in some places. This long-term manufacturing time has created disruptions in the delivery schedules of manufacturers, in turn resulting n delays.
Sunil Kumar Khurana, CEO and MD of BPL medical technologies, commented on the shortage, saying that they are trying to manage the demand and hold the prices of the devices.
Due to the current delay and uncertainty, the acute shortage will create many problems for the next year when the existing stocks of the microprocessor chips will be depleted.
BPL Medical Technologies sell anaesthesia machines, patient monitors and ICU ventilators.
The market has already been depleted of patient monitors, defibrillators, and ECG’s that use touch screens. The chips used in these devices are imported from China, the USA, Japan and Taiwan.
Some manufactures in this sector expressed their disappointment saying they faced these bottlenecks because the then government and country neglected the computer hardware sector from the time of the ’90s, unlike China and didn’t become self-reliant.
Deloitte, a company from the USA, surveyed and interviewed people from the Medtech Association and shared some crucial findings: Two-thirds of companies have semiconductors and firmware/embedded software in over half of their products. In addition, 50 per cent of respondents report that connected devices, which also require semiconductors, comprise half of their product portfolio.
MedTech’s primary needs are 2nd or 3rd generation chips, competing with automotive, industrial, and consumer industries for critical chips rather than high tech.
All respondents have experienced some disruption to their chip supply chain (figure 1). The most common disruptions are delays, order cancellations and short orders. Delays vary significantly, from two to 52+ weeks.
According to one MedTech procurement lead, “Initially, we were told we need to issue purchase orders until 2024, but that doesn’t seem to be enough to secure supply anymore.
Vishwaprasad Alva, MD of Skanray Technologies, Manufacturer of critical care unit and ICU equipment, commented that the industry had sensitized the centre several times since 2012 about the requirement of semiconductor fabrication plants to become genuinely “Atmanirbhar” in the field of electronics and Medtech.
But the government completely ignored their advice and neglected them. China is always a step before us, and it has a clear and executable strategy. It is a pressing matter, and he thinks that the government should seriously consider improving the country’s condition in this industry.
He expressed his thoughts, saying that there is no time to invent, but of possible we can coy China’s hardware model.
It is not very late to be utterly Atmanirbhar in this sector in 10 years if there is a separate ministry for self-reliance and a non-political expert’s panel. The global semiconductor market is expected to double in 7 years.
In 2019, the medical chip revenue was 1% of the total semiconductor market.
