The tariff war has entered a white-hot stage, and the United States' recent comprehensive investigation into semiconductors has once again brought new uncertainties to the medical device field.
On April 15, according to Cailian Press, the U.S. Department of Commerce stated in two notices that it has begun investigating the impact of imports of "semiconductors and semiconductor manufacturing equipment" as well as "pharmaceuticals and pharmaceutical ingredients, including finished drug products" on U.S. national security.
This extensive investigation into semiconductors will evaluate imports of traditional and cutting-edge chips. According to the government announcement, the investigation will cover imports of all semiconductors, equipment used to manufacture these semiconductors, and electronic products containing these components.
According to Singapore's Lianhe Zaobao website on April 15, citing Bloomberg News, this investigation could be a precursor to the United States imposing additional tariffs on semiconductors and pharmaceuticals, and the trade war initiated by Trump is likely to expand further.
Semiconductor technology is an important force driving modern medical equipment. From large equipment like PET-CT scanners, oximeters, and ventilators to small devices like defibrillators and implanted pacemakers, all are closely related to semiconductors. In particular, currently, with medical equipment beginning to deeply integrate with AI and a new computing power revolution emerging, the importance of semiconductor technology is further highlighted.
In an interview with ABC on April 13, U.S. Secretary of Commerce Lutnick stated that the U.S. government announced on the evening of the 11th the exemption of tariffs for a series of electronic devices, and these related products would come under semiconductors, and to ensure they return to domestic production, the United States would introduce special "semiconductor tariffs" which are coming in "a month or two."
Currently, China's semiconductor industry is still in its early stages of development. According to data from the LeadLeo Research Institute, domestically developed semiconductor devices used in Chinese medical equipment account for about 4-5% of China's total medical semiconductor procurement.
In the context of the tariff war, the United States' investigation into semiconductors, linking them to its national security, has to some extent created a new shock to China's medical equipment industry. It may cause an increase in procurement costs for some core components in the short term, and even supply chain disruptions.
However, from a long-term perspective, every crisis is accompanied by opportunity. China has been laying the groundwork for a technological reshuffle for years.
Chinese enterprises' steps toward technology-driven breakthroughs have never stopped and are gradually entering the payback period, while policy and market-driven support is accelerating.
Taking the medical field as an example, many places in China have released "imported medical equipment procurement lists," clearly restricting some imported medical devices, which creates favorable conditions for the promotion of Chinese-developed equipment and provides buyer assurance for the development of domestic semiconductors.
According to data from Semiconductor Equipment and Materials International (SEMI), the localization rate of semiconductor equipment of Chinese wafer manufacturers in 2022 significantly improved compared to 2021, with higher localization rates for mid- and low-end semiconductor products such as connectors and amplifiers.
China's ability to withstand risks related to semiconductors, a technological bottleneck, is gradually improving.
Under the knock-on effect of this round of tariff game, the impact on the medical device industry is not limited to semiconductors.
On April 4, the Ministry of Commerce of China officially announced the initiation of an industrial competitiveness investigation into imported medical CT X-ray tubes, as well as an anti-dumping investigation into relevant medical CT X-ray tubes originating from the United States and India.
CT X-ray tubes are the most expensive consumable component in CT scanners. According to VAREX's financial report, globally, CT X-ray tubes are replaced once every two to four years on average, and the global installed CT scanner market has an annual replacement tube demand of about 100,000 to 140,000 tubes.
The Chinese CT scanner market instantly entered a new period of transformation with the announcement of the investigation. As with the semiconductor case, if dumping is ultimately determined, Chinese CT-related enterprises will also face important choices between increased costs and local substitution, and the huge installed CT scanner market in China will directly influence the final outcome of the issue.
According to a research report by Zhiyin Capital, due to the high usage rate of CT scanners in China, some hospitals even replace tubes every 6 to 12 months. As a result, China's installed CT scanner market has an annual replacement tube demand of about 40,000 to 60,000 tubes. Overall, the market size for CT replacement tubes in China alone could exceed RMB 10 billion annually.
For X-ray tube manufacturers, changes in the external environment have created enormous incremental space, and how much they can take will depend on the level of technological advancement. For multinational companies, if they don't want to give up the huge Chinese market, production in China or technology licensing has become inevitable, which will help the overall upgrade of China's CT X-ray tube industry.
As of today, the final result of this round of the game is still uncertain. It will likely increase costs for Chinese and foreign medical device enterprises, however, this does not mean that the path for Chinese medical devices to go global is closed.
According to a recent report from CCTV's News 1+1 program, Tu Xinquan, Director of the China Institute for WTO Studies, UIBE, stated that although the U.S. market is currently the world's largest market, it only accounts for 15% of China's export share, meaning that 85% of the broader world market is waiting for China to explore.
In the meantime, the call for independence and controllability in the medical device field has been ongoing for years, and now is the time for testing. In the new market environment, Chinese enterprises with high self-production rates in their supply chains will have tremendous advantages and are expected to see performance certainty and valuation correction under the background of the optimization and upgrade of centralized procurement policies.
Source: Saibailan Devices
01
United States Launches Investigation into Semiconductors
Tariff War May Again Affect Medical Equipment
United States Launches Investigation into Semiconductors
Tariff War May Again Affect Medical Equipment
On April 15, according to Cailian Press, the U.S. Department of Commerce stated in two notices that it has begun investigating the impact of imports of "semiconductors and semiconductor manufacturing equipment" as well as "pharmaceuticals and pharmaceutical ingredients, including finished drug products" on U.S. national security.
This extensive investigation into semiconductors will evaluate imports of traditional and cutting-edge chips. According to the government announcement, the investigation will cover imports of all semiconductors, equipment used to manufacture these semiconductors, and electronic products containing these components.
According to Singapore's Lianhe Zaobao website on April 15, citing Bloomberg News, this investigation could be a precursor to the United States imposing additional tariffs on semiconductors and pharmaceuticals, and the trade war initiated by Trump is likely to expand further.
Semiconductor technology is an important force driving modern medical equipment. From large equipment like PET-CT scanners, oximeters, and ventilators to small devices like defibrillators and implanted pacemakers, all are closely related to semiconductors. In particular, currently, with medical equipment beginning to deeply integrate with AI and a new computing power revolution emerging, the importance of semiconductor technology is further highlighted.
In an interview with ABC on April 13, U.S. Secretary of Commerce Lutnick stated that the U.S. government announced on the evening of the 11th the exemption of tariffs for a series of electronic devices, and these related products would come under semiconductors, and to ensure they return to domestic production, the United States would introduce special "semiconductor tariffs" which are coming in "a month or two."
Currently, China's semiconductor industry is still in its early stages of development. According to data from the LeadLeo Research Institute, domestically developed semiconductor devices used in Chinese medical equipment account for about 4-5% of China's total medical semiconductor procurement.
In the context of the tariff war, the United States' investigation into semiconductors, linking them to its national security, has to some extent created a new shock to China's medical equipment industry. It may cause an increase in procurement costs for some core components in the short term, and even supply chain disruptions.
However, from a long-term perspective, every crisis is accompanied by opportunity. China has been laying the groundwork for a technological reshuffle for years.
Chinese enterprises' steps toward technology-driven breakthroughs have never stopped and are gradually entering the payback period, while policy and market-driven support is accelerating.
Taking the medical field as an example, many places in China have released "imported medical equipment procurement lists," clearly restricting some imported medical devices, which creates favorable conditions for the promotion of Chinese-developed equipment and provides buyer assurance for the development of domestic semiconductors.
According to data from Semiconductor Equipment and Materials International (SEMI), the localization rate of semiconductor equipment of Chinese wafer manufacturers in 2022 significantly improved compared to 2021, with higher localization rates for mid- and low-end semiconductor products such as connectors and amplifiers.
China's ability to withstand risks related to semiconductors, a technological bottleneck, is gradually improving.
02
Imported CT X-Ray Tubes Under Investigation
Domestic Substitution Responsibility Increases
Imported CT X-Ray Tubes Under Investigation
Domestic Substitution Responsibility Increases
Under the knock-on effect of this round of tariff game, the impact on the medical device industry is not limited to semiconductors.
On April 4, the Ministry of Commerce of China officially announced the initiation of an industrial competitiveness investigation into imported medical CT X-ray tubes, as well as an anti-dumping investigation into relevant medical CT X-ray tubes originating from the United States and India.
CT X-ray tubes are the most expensive consumable component in CT scanners. According to VAREX's financial report, globally, CT X-ray tubes are replaced once every two to four years on average, and the global installed CT scanner market has an annual replacement tube demand of about 100,000 to 140,000 tubes.
The Chinese CT scanner market instantly entered a new period of transformation with the announcement of the investigation. As with the semiconductor case, if dumping is ultimately determined, Chinese CT-related enterprises will also face important choices between increased costs and local substitution, and the huge installed CT scanner market in China will directly influence the final outcome of the issue.
According to a research report by Zhiyin Capital, due to the high usage rate of CT scanners in China, some hospitals even replace tubes every 6 to 12 months. As a result, China's installed CT scanner market has an annual replacement tube demand of about 40,000 to 60,000 tubes. Overall, the market size for CT replacement tubes in China alone could exceed RMB 10 billion annually.
For X-ray tube manufacturers, changes in the external environment have created enormous incremental space, and how much they can take will depend on the level of technological advancement. For multinational companies, if they don't want to give up the huge Chinese market, production in China or technology licensing has become inevitable, which will help the overall upgrade of China's CT X-ray tube industry.
As of today, the final result of this round of the game is still uncertain. It will likely increase costs for Chinese and foreign medical device enterprises, however, this does not mean that the path for Chinese medical devices to go global is closed.
According to a recent report from CCTV's News 1+1 program, Tu Xinquan, Director of the China Institute for WTO Studies, UIBE, stated that although the U.S. market is currently the world's largest market, it only accounts for 15% of China's export share, meaning that 85% of the broader world market is waiting for China to explore.
In the meantime, the call for independence and controllability in the medical device field has been ongoing for years, and now is the time for testing. In the new market environment, Chinese enterprises with high self-production rates in their supply chains will have tremendous advantages and are expected to see performance certainty and valuation correction under the background of the optimization and upgrade of centralized procurement policies.
Source: Saibailan Devices