On the 13th (local time), the market research firm Precedence Research projected that the global medical device market size will grow from $640.45 billion (approximately 875 trillion won) last year to about $1.14695 trillion (1,567 trillion won) by 2034. The average annual growth rate is 6%.
The global medical device market continues to grow steadily, driven by an aging population and an increase in chronic disease patients, as well as technological advancements. Corporations are increasing their research and development (R&D) investments, while regulatory authorities such as the U.S. Food and Drug Administration (FDA) are streamlining approval processes to support market growth.
However, the medical device market is facing new challenges from both inside and outside the industry. Since the beginning of the second term of the Trump administration in the United States, trade risks such as tariff policies and trade regulations have emerged as issues that could hinder the growth of the medical device industry. Additionally, concerns about data security are identified as factors that could impede market growth.
◇Global medical device corporations report surprising Q1 results
Global medical device corporations are reporting surprise results that exceed expectations in line with market growth.
Intuitive Surgical, the world's leading surgical robot company, reported Q1 sales of $2.25 billion, a 19.2% increase compared to the same period last year, while earnings per share (EPS) increased by 4.6% year-on-year to reach $1.81. This is considered an earnings surprise that exceeded market expectations.
In the first quarter, GE Healthcare, a medical imaging equipment manufacturer, reported sales of $4.8 billion (6.552 trillion won), a 4% increase compared to the same period last year. The company also noted a 10% increase in its own orders compared to the previous year. Its major products include ultrasound, magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) equipment.
U.S. medical device corporation Medtronic reported that its fiscal year sales from May last year to the end of April this year increased by 3.6% year-on-year to $33.5 billion (45.71 trillion won), with operating profit rising by 16% to $6 billion (8.1876 trillion won), as announced on the 21st (local time).
Sales from February to April this year (fiscal Q4) reached $8.9 billion (12 trillion won), a 3.9% increase year-on-year, and adjusted operating profit increased to $2.5 billion (3 trillion won), up 7.6%. By institutional sector, cardiovascular division sales increased by 6.6%, neuroscience sector by 2.9%, medical surgery sector by 0.6%, and diabetes division increased by 10.3%.
This corporation supplies medical equipment used for diagnosis, treatment, and surgery in the areas of cardiovascular, neuroscience, and diabetes diseases to the global market. Representative products include pacemakers, cardiovascular stents, vascular tubes and catheters for cardiopulmonary surgery, deep brain stimulators for neurological diseases, and insulin pumps.
Analysis indicates that leading global medical device corporations continue to grow while improving quality and technology with sustained R&D investments. GE Healthcare fully acquired the UK-based Intelligent Ultrasound Group, which has AI technology, last year. Medtronic has introduced the robotic surgical system Hugo to South Korea after its launch in Europe. It is currently undergoing the approval process in the U.S.
◇Domestic companies also venture into the global market
Domestic medical device corporations are intensifying their efforts to explore overseas markets, leveraging product quality and price competitiveness alongside localization. Consequently, the trade balance continues to show a surplus.
According to the Ministry of Food and Drug Safety, the trade balance of the Korean medical device industry recorded a surplus of 587.8 billion won in 2023, achieving a surplus for four consecutive years since 2020. The size of the Korean medical device market in 2023 is 10.727 trillion won. Although the market size decreased by 9.7% from the previous year due to the sluggish business of diagnostic kit companies transitioning to the COVID-19 endemic, it showed a 37.5% growth compared to 2019.
Among domestic medical device corporations, the largest in sales size is Osstem Implant, a company specializing in dental implants and diagnostic devices. The company's consolidated sales last year increased by 8.9% year-on-year to 1.3155 trillion won. The company explained that its competitive advantage is a result of market expansions in not only Korea but also China, the U.S., Europe, and Southeast Asia, alongside investments in production facilities and R&D.
Samsung Medison, a medical imaging company, reported sales of 571.2 billion won last year. Beginning with sales of 308.4 billion won in 2020, it showed double-digit growth each year. If this trend continues, this year could achieve 600 billion won.
After the COVID-19 pandemic, the performance of diagnostic kit companies that were hit is gradually recovering. SD BIOSENSOR reported a consolidated sales figure of 694.6 billion won last year, a 5.9% increase from the previous year, while Seegene's sales rose approximately 12% year-on-year to 414.3 billion won. Both companies have focused on expanding their product lines and markets to reduce their dependence on COVID-19 diagnostic kits.
SD BIOSENSOR has been acquiring overseas diagnostic device distributors and manufacturers since the end of 2021. This was a strategy to accelerate entry into the global in vitro diagnostic market. In 2022, it, along with domestic private equity firm SJL Partners, acquired the U.S. in vitro diagnostic company Meridian Bioscience for approximately 2 trillion won. Prior to this, it acquired Germany's Bestbion, Italy's Relab, and Brazil's Eco Diagnostica.
Seegene transitioned to a professional management system last year, enhancing its diagnostic product lines in non-COVID-19 areas such as tuberculosis and respiratory diseases, and also acquired software companies Brex and Pentaworks for digital enhancement.
Recently, the growth of medical beauty device corporations has been remarkable. CLASSYS reported Q1 sales of 77.1 billion won, a 53% increase compared to the same period last year, while operating profit was 38.8 billion won, a 46% increase year-on-year. APR, which owns the beauty brand "MediCube," reported consolidated sales of 266 billion won in Q1, a 79% increase compared to the same period last year, and operating profit of 54.6 billion won, a 97% increase from the previous year.
◇Uncertainty over tariffs remains amid U.S.-China trade war
A variable affecting the global medical device market is the tariff policy initiated in the U.S. Corporations are closely monitoring global tariff variables. U.S. medical device companies have grown through exports, with many of the components in their products originating from China. Additionally, their manufacturing facilities are located outside the U.S., in places like Mexico and Europe. Due to this business structure, they stand to be impacted by the reciprocal tariffs and tariffs on imported components between the U.S. and China.
Last month, U.S. President Donald Trump stated he would impose a 145% tariff on all imports from China, to which China responded by stating it would impose a retaliatory tariff of 125%. Thus, when U.S. companies export semi-finished or finished medical devices to China, a 125% tariff will be imposed, while parts imported from China to the U.S. will incur a 145% tariff.
Moreover, products manufactured in Mexico are not subject to tariffs upon entering the U.S., although a 25% tariff may apply to certain items. Imports from European factories incur a 10% tariff.
Recently, as the U.S. and China agreed to temporarily lower their mutual tariffs, the industry was somewhat relieved. They announced on the 12th (local time) that they would reduce tariffs on imports from China and the U.S. to 30% and 10%, respectively, for the next 90 days.
Park Seon-young, a research fellow at Mirae Asset Securities, evaluated by saying, "Excluding macroeconomic uncertainties such as global tariff policies, the fundamentals of global medical device corporations like Intuitive Surgical are solid." However, some suggest it is still too early to feel reassured. An industry insider noted, "The Q1 results did not reflect the impact of tariffs, and depending on the consequences of tariffs, performance and trends may change; thus, we need to keep an eye on the global market situation."