You would think it’s more important to supply manufacturers of life-saving equipment than the latest video game console. That is not the case with vital semiconductor chips used in both industries and many more. Today we cover the chip shortage from how it’s affecting the healthcare system and medical device manufacturing, to what such companies are doing to weather this difficult time.

Everyone Suffers from Medical Devices Delays

Computer chips are essential components in vital medical devices, equipment, and systems. Healthcare staff from clinicians to support staff rely on that computer in the ICU, for example, as the conditions of patients in the ICU can change quickly. Access to real-time data allow them to ensure that signs of deterioration are not missed. 

Unfortunately, healthcare providers are having to wait longer to receive needed devices or are being turned away because the medtech manufacturer cannot secure enough chips to make products. 

The chip shortage could not come at a worse time. Many healthcare providers are under immense pressure as the patient population grows older and rates of chronic conditions like diabetes continue to rise. At the same time, they have to see more patients while staff support drops or is cut entirely.

Providers suffer because they’re forced to wait on the proper instruments to provide vital readings to make their diagnosis. This affects patients, who receive unnecessary delays in their care, some of which may be urgent. Medical device manufacturers lose out on profits which can be turned to improving their products and services. 

Prioritizing MedTech with Cars, Video Games for Chips

The semiconductor chip shortage, which had its beginnings back in early 2020, plagues more than 169 industries. Most media reporting continues to focus on high-profile, economy-driving sectors like consumer electronics (e.g., video games) and the automotive industry. Medical device manufacturers, collectively called “MedTech”, have been pushing to be included on that list of high-priority industries.

Their argument is strong. Patients rely on medical technologies like medical computers for lifesaving and life enhancing care. The severe global shortage of chips places at potential risk millions of patients across the United States who depend on chip-powered equipment and devices including:

  • Ventilators and defibrillators that respond to sudden cardiac arrest.
  • Imaging machines such as ultrasound devices that examine an unborn baby’s development.
  • Glucose, ECG, EEG, and blood pressure monitors. 
  • Implantable pacemakers.

Medtech Struggles with Chip Shortage

Advanced Medical Technology Association (AdvaMed), is the leading association of medtech manufacturers. AdvaMed members were polled recently about the shortage and how it was affecting them. It was discovered:

  • Two-thirds had chips and firmware in over half of their products. 
  • Roughly half of those surveyed stated that connected devices, which also come with chips, made up to half of their product offerings.
  • Biggest need by members is for 2nd and 3rd generation computer chips. Unfortunately, the automotive, industrial, and consumer sectors are also clamoring for them. 
  • All medtech manufacturers have suffered some form of disruption to their chip supply chain at one time or another. These were usually delays, order cancellations, and short orders. The impact could be severe with new chip delivery taking over 52+ weeks. 

Baxter International Inc. is an example of one company impacted by the shortages of electromechanical components like semiconductor chips. Many of the company’s products like patient monitoring systems and continuous renal replacement therapy systems require multiple chips per device. Its Spectrum IQ infusion system requires approximately 70 chips per pump alone.

Baxter estimates that its production levels this year dropped globally from 20 percent to 80 percent depending on the device, equipment, or product. In fact, it has been forced to idle manufacturing lines to even stop production entirely due to component shortages like chips. 

Hologic has been affected similarly. The company, a pioneer in 3-D mammography technology, has had to scramble even for the few chips necessary for its devices. 

“The chip shortage is very real,” states Stephen MacMillan, CEO of Hologic. “We’re competing, frankly, we said, ‘Hey, can you give us some instead of the video games?’ I think last I checked, [health care’s] a little more important.” As he points out, “The key to the annual mammogram, and especially 3-D, is it detects things much quicker and earlier. It also has lower false positives.”

Five Ways Medtech’s Handling Lack of Chips

Medtech manufacturers, along with many other companies in various industries, are turning to various strategies to secure computer chips. Many are unusual for the companies and include:

  • Alternative suppliers

All current medtech manufacturers are looking into various, alternative sources of chips. This is unusual: in the above poll, over half stated they usually stick to one supplier to provide 75 percent of their chips.  

  • Using brokers

A broker is a person or company who arranges transactions between buyers and sellers. Prior to 2020, few medtech manufacturers used them. Now up to a third are turning to brokers to find and secure the necessary chips. 

  • Increased inventory stocks

Nearly three-fourths of the survey medical device makers are stockpiling computer chips, something nearly unheard of prior to the pandemic and supply chain disruption. The hope is lead times for the valuable chips will drop once demand levels match supplies. Companies can then resume hopefully normal purchasing. 

  • Greater flexibility in component design

Device manufacturers are looking to make supply chain preparedness an integral part of their product design and development. These range from designing device components that can be made from multiple companies to various means of shipping them to the right plants. This is despite the process being more cumbersome compared to just using one design or very few sources. 

  • Supply chain visibility

Before 2020, medtech companies, along with most industrial ones, rarely considered supply chains. Since then most have increased their multi-tier visibility between them and their suppliers. Many have turned to digital means to track supply chains. This ranges from where suppliers get their products from, when the requested parts arrives at a warehouse, its shipping information, to how it’s shipped (e.g., train, airplane). This allows buyers to identify issues more quickly which in turn enables quicker responses while reducing risks. 

Closing Comment

Semiconductor chips are all-important in virtually every form of electronics. Their current shortage because of the COVID-19 pandemic highlights the lack of priority towards critical industries such as medical devices and equipment.

If your healthcare group is looking for medical tablets or other computers for your medical devices, contact a representative from Cybernet. Learn how being an local Original Equipment Manufacturer (OEM) helped weather the chip shortage which in turn helps clients with their projects.

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