Semiconductor Shortage Hits Supply Chain For MedTech Industry

According to a study commissioned by AdvaMed, the global semiconductor chip shortage is causing delays, order cancellations, and other supply disruptions at MedTech companies. Deloitte conducted the survey.
The survey found that all respondents have experienced delays ranging from two weeks to more than one year.
AdvaMed used the findings highlight to prioritize the semiconductor supply chain for Medical Technology firms over other industries that use the components.
The survey found that two-thirds of MedTech companies use semiconductors in at least half of their products.
Deloitte found that carmakers and high-tech manufacturers' second and third-generation chips are "primary needs" for MedTech, putting the industry directly competing with other sectors.
More than 70% of respondents rely on a single supplier for their semiconductors, the survey found.
According to one interviewed MedTech procurement lead, "We are trying to identify alternative sources but qualifying new materials is time-consuming and expensive."
One MedTech procurement lead said, "Initially, we were told we need to issue purchase orders until 2023, but that doesn't seem to be enough to secure supply anymore."
Deloitte does expect the situation to start improving later this year and in 2022-2023.
Currently, companies in various industries, including MedTech, are over-ordering to build buffer stocks.
Once companies amass enough chips to feel comfortable, demand should fall and begin to normalize lead times.