MICRO MOLDING, TAX HIKES AND GAINING THE COMPETITIVE EDGE!
10/31/13 News on refinements to and new applications of micro molding hit the headlines daily these days, and at MES, we keep abreast of all these developments, and in many instances we are the ones making the news!!
Although by no means a new technology, many OEMs (and it has to be said many service suppliers to these OEMS), are still grappling with the tricky issues associated with molding parts and components at ever-smaller sizes. However, despite the inherent difficulties in using these technologies, the opportunities that are opened up once the discipline has been mastered are mind boggling, and so there is a massive increase in the micro molding market-place.
Micro injection molding is typically used for parts that are designed with weight less than a milligram and size less than 1mm, and it is also used on larger products that require micro-sized features.
As a supplier of micro molding services, we at MES can feel the surge in momentum as more and more OEMs approach us for help. But a report published this week on the global polymer and thermoplastic micro molding market really brings it home what a vast market this is becoming, and how quickly it is growing. The report — published by Dublin-based market research company Markets and Research — analyses the micro molding market for the period 2013-2019, and indicates that momentum is building across industry.1
The report indicates that it is the medical sector that dominates the market for micro molding, accounting for 35% of the total market in 2012. In the period up to 2019, it is the burgeoning area of microfluidics technology that will continue to drive the growth of micro molding in the medical arena. Microfluidic technology is used to control the behavior of gases and liquids at the micro scale, and has various uses in drug delivery, implants, and diagnostics (so-called lab-on-a-chip systems).
Regionally speaking, North America is shown to be the largest micro molding market, and is set to see double digit (14.5%) CAGR between 2013 and 2019, much of this driven by the exponential growth in components and devices that facilitate non-invasive surgical techniques. Europe is the next largest region, and is expected to account for 36% of global demand by 2019.
The report — and our personal experience at MES — reinforces the massive importance of the medical sector in the growth of micro molding. Here the drivers are smaller and smaller parts for invasive surgical applications, and a constant requirement for lower and lower manufacturing costs to ensure product viability.
So saying, it could be argued that the recent 2.3% sales tax on medical devices which came into effect January 1st 2013, could come as unwelcome news for medical device manufacturers in particular and the micro molding sector in general. But it is our feeling that this tax will in fact act as a spur to the micro molding sector, as manufacturers through necessity have to further sharpen their pencils and look for the most cost-effective and efficacious routes for mass manufacture.
As well as leading the way in the micro molding sector, the United States is also global leader in medical devices, but not by much, and it is quite possible that tax regimes such as the levy on sales (based as it is on gross sales not profit) could force a few manufacturers to look abroad for less punitive tax regimes. Some U.S.-based medical device manufacturers already feel somewhat beleaguered by the regulatory climate surrounding medical devices, and putting an extra tax burden on them could just be the straw that breaks the camels back.
But here, medical device manufacturers and micro molding subcontractors like MES should work together to find solutions, and indeed the government should also once and for all recognize the importance of, and back research initiatives in, the micro manufacturing sector. There is an obvious and much acknowledged gap between the sort of backing the micro sector gets in Europe and the backing it gets in the U.S. It is our view at MES that the critical role that a mature micro-manufacturing sector has in giving OEMS from across industry global competitive advantage must now be recognized.
At MES we work extremely closely wit
h numerous medical device OEMs, and of course we have an intimate understanding of the regulatory hoops that have to be negotiated, and the technologies that fall under the micro manufacturing umbrella. But above all, we appreciate the fact that micro molding is a disruptive technology. It clearly breaks down preconceived barriers restricting product design and cost-effective manufacturability. So for many OEMs, it represents a key part of the solution when grappling with new tax hikes and an attempt to remain profitable and competitive.
It is incumbent upon medical device OEMs to recognize that micro molding opens up opportunities for smaller devices, with fewer components, and can reduce manufacturing costs, and increase productivity.
To remain competitive, and for the U.S. medical device sector to remain the global force that it is, OEMs must be encouraged to move away from conventional molding technologies, and costly alternatives such as machining. It is vital that OEMs speak with specialist providers such as MES to assess the technologies available, and to factor in the possibilities molding on the micro level opens up at the design stage, and also in respect of reduced overall manufacturing costs.
The medical device sector is not the same as the pharmaceutical sector, and the majority of U.S. based medical device OEMs are 50 employee SMEs. Yes, on the one hand, this means that they are smaller than their Big Pharma cousins, and are therefore more susceptible to tax hikes, but conversely they are also more agile, and can move more quickly to take advantage of new design and manufacturing possibilities.
There are moves afoot in Congress to repeal the excise tax on medical devices, but whether it remains in force or not, the inexorable move towards micro manufacturing and micro molding by medical device OEMs must continue for individual businesses and the overall U.S. industry to remain viable, and to continue to innovate and lead the world in important areas of healthcare.
MES remains ready to assist with your endeavours, and would be happy to discuss ways in which we can facilitate your micro designs, and mitigate your increasing costs of manufacture. To find out about how micro molding could be the key technology that will drive to your pipeline innovations, please call Donna Bibber, President of MES, on t. +1 (774) 230-3459 or via email on donna@microengineeringsolutions.com.
1. Research and Markets. “Global Polymer and Thermoplastic Micro Molding Market 2013-2019.” September 2013.
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