Application Watch: PCB assemblies for hospital, home-use medical devices

Makers of PCB assemblies in China keep sight of niche but growing medical products market.

China suppliers of PCB assemblies harness manufacturing capability to maximize opportunities, including in small but high-value applications such as medical devices. In the last, they anticipate greater prospects as the wearables and home healthcare categories accelerate, with the first to realize 16 percent CAGR in 2015-23, according to Transparency. The other is projected to reach almost 9 percent CAGR from 2016 to 2020, said Technavio. A further spur for local companies is the expanding global outsourcing market for this industry. CAGR will surpass 11 percent between 2016 and 2020, according to Technavio.

Domestic PCB assembly makers therefore continue to bolster SMT capability while maintaining their DIP lines to enhance competitiveness and widen customer base. They highlight competence for 0402, 0201 and 01005 components.

Poe Precision Electronics Co. Ltd has six SMT lines, which include Samsung and Panasonic machines, besides two for DIP and one assembly line. It can handle 200 million components per month. Leach (SZ) Co. Ltd runs two each of SMT and DIP lines. The average capacity is 1.5 million points per day, which will have increased to 2 million points before 4Q16. STG Electronics Co. Ltd employs eight SMT assembly and four DIP lines. So far, there are about 50,000 SMT lines or more than 100,000 surface-mount machines in China.

For quality, manufacturers subject PCB assemblies to checks from IQC, IPQC and FQC to OQC. Poe has two automated optical inspection or AOI machines, a flying probe and an in-circuit testing apparatus for this. The supplier also implements OQC to reduce returns due to product defects. STG uses AOI equipment and has 10 lines for function testing.

Overall, PCB assembly production follows ISO guidelines, with ISO 9001 compliance commonly adopted in China. Besides ISO 9001, Leach has secured certification under ISO 13485, which applies to medical devices and related services.

China companies look forward to stable sales growth in coming years, although medical applications currently represent less than 10 percent of total revenue for the majority. Leach generates about 25 percent of sales from products mostly for hospital and home-use devices, and Poe and STG about 10 percent.

Manufacturers said most orders come from overseas, primarily Europe and the US. Approximately 80 percent of Leach's output is shipped abroad, and 100 percent of that of Poe and STG. This is because production of medical devices remains dominated by international players, 15 of which collectively own 40 percent of the market. Medtronic, Johnson & Johnson, Siemens, Roche, Becton Dickinson, Stryker, Abbott, GE, Danaher and Philips are among the key companies.

There are more than 1,000 suppliers of PCB assemblies in the mainland and almost all can extend their services to medical products. Local businesses make up about 80 percent of the maker pool and those with investment mainly from Taiwan and Hong Kong the rest. About 60 percent of the companies are in Guangdong province, specifically in the cities of Shenzhen, Dongguan and Guangzhou.

Mainstream PCB assemblies

Mainland companies provide PCB assembly services for hospital- and home-use medical products based on various PCBs, from single-sided to multilayer, rigid-flex, flexible and HDI types. Commonly turned out are assemblies adopting double-sided and multilayer PCBs, which have a combined production share exceeding 80 percent. In the latter category, typical models use low-layer PCBs, mostly 4, 6 and 8-layer kinds. Poe's mainstream selection has 6 and 8-layer PCB assemblies, and that of STG 4-layer variants.

By IC packages, local capability covers DIP, SDIP, SOP, SSOP, TSOP, PLCC, QFP, QFN, SON and BGA.

Suppliers source PCBs from local, Taiwan and Japan providers, while there are companies such as Poe that produce them in-house. The maker can turn out up to 28-layer PCBs at 40,000sqm monthly.

For ICs, companies turn to domestic agents of foreign makers such as Atmel, TI, Fairchild, Toshiba and STMicroelectronics.

The rest of electronic components, soldering wire and paste, and adhesive are purchased in the mainland.

Makers accommodate buyers' requirement on components. They offer R&D, component sourcing and aftersales services, in addition to production, testing, assembly and packaging. Companies are flexible to low-volume and high-mix orders, especially for this high-value application.

Despite climbing labor cost, manufacturers will keep prices steady to keep orders coming.