2025 Medical Device Semi-annual Report: Behind the 1.16 trillion yuan scale, 70% of high-end chips rely on imports. Who is holding back domestic substitution?

Have you all noticed that when it comes to medical devices nowadays, the terms "high growth" and "big market" are always unavoidable? I recently opened the news and found that "the market will exceed 2 trillion yuan by 2027" and "the sales of AI medical equipment have soared". It seems like a sure-win track.

But if you think about it carefully: The smart blood pressure monitors used by the elderly at home and the CT machines used in hospitals for examinations are said to be domestic, but when you take them apart, the core chips of high-end imaging equipment are actually 70% imported, and 80% of high-end IVD reagents rely on overseas supplies.

What is even more contradictory is that the market size of the medical consumables sector had already soared to 116.3 billion yuan in the first quarter of 2025, but the index has plummeted by 12% since April.

What's your opinion on the data of a future worth trillions? How difficult will the road to domestic substitution be in the future? Once hailed as an "eternal sunrise industry", how will it proceed on the road ahead?

Let's take a look at these data together, and perhaps we will understand.

一、The Real Situation under the Prosperity of Medical Devices

When it comes to the scale of China's medical device industry, many people would mention "breaking through 1.3 trillion yuan in 2023" and "the second largest market in the world". In the sub-sectors, medical imaging devices have become the absolute "main force" with a 58% share of bidding and tendering - CT and MRI in hospitals are almost all dominated by it. But if the "scale filter" is removed, the gap becomes a bit

In 2024, the revenue of Mindray Medical, the leading domestic company, was less than one sixth of that of Medtronic, the international giant. After five years of Shouting about "domestic substitution", the domestic production rate of CT and MRI has just exceeded 40%, while the "hearts" of high-end equipment such as precision optical components and high-performance sensors still account for over 60% of imports.

What is even more puzzling is the sub-sectors:

From May to June 2025, the index of the medical equipment sector outperformed the industry by 10%. The market size of AI medical devices is expected to soar by 213.6% in 2024, the penetration rate of surgical robots will exceed 15%, and more than 500 5G remote surgeries have been performed.

However, the medical consumables sector has been on a continuous decline. Since February, the index has dropped by more than 12%, and the average price of high-value consumables in centralized procurement has decreased by 78.6%. Many enterprises that produce coronary stents and artificial joints have been forced to either lower prices to survive or exit the market.

Why do some medical device enterprises make huge profits while others have to "cut off the arm to survive"? In fact, the answer is quite simple: Low-end products that rely on policy protection and channel advantages can never withstand the impact of centralized procurement and technological iteration. Enterprises that hold core technologies have long established a firm foothold in the high-end market.

二、the market is large, but the road ahead is difficult

The medical device industry has a trillion-yuan market. The cake looks tempting, but if you really take a bite, you will find that there are "three major mountains" blocking your way.

The first one: The weakness of technological innovation

In 2024, the National Medical Products Administration approved 65 innovative medical devices. Although the number seems considerable, the average R&D investment intensity of domestic enterprises is only 3.5%, less than half of that of international giants.

What is even more troublesome is the difficulty in transforming industry-university-research cooperation into practical applications. Many technologies in laboratories may look impressive, but it often takes more than five years to go from prototypes to clinical application. By the time they are truly launched on the market, the best window of opportunity has long been missed.

Just like high-end ECMO equipment, domestic enterprises can produce complete machines, but the core membrane lung components still have to be imported to this day.

The second one: The Lag in green transformation

Nowadays, everyone is talking about the "dual carbon" goals, but the greening of the medical device industry is ridiculously slow. The cost of degradable medical materials is 40% higher than that of traditional PVC, and the industry usage rate will be less than 5% by 2025.

Many business leaders have stated straightforwardly: "Environmental protection investment is a long-term account. With such fierce market competition and severe price cuts in centralized procurement, it's hard to survive first. How could we dare to bet on green materials?" "

The result is that a large number of disposable medical devices become "medical waste" after use, which not only pollutes the environment but also wastes resources.

The third one: The Growing Pains of anti-Corruption in the medical Sector

In the first half of 2025, news about many consumables enterprises being fined for "selling with kickmoney" occurred frequently: On May 21st, a certain biotechnology company in Jinan was fined 600,000 yuan by the Shandong Provincial Market Supervision and Administration Bureau for selling equipment at low prices and bundling consumables. On August 1st, a certain (Shanghai) medical equipment company was notified by Anhui Province for giving kickbacks to hospital staff. Enterprises in places like Qingdao and Henan have also been investigated and dealt with for similar operations.

Behind these cases lies a significant increase in the compliance costs for enterprises. Enterprises that used to rely on "sales with bonuses" now have to spend money on compliance training, hire legal departments to sort out processes, and establish internal supervision mechanisms. All in all, the compliance costs have increased by about 30% compared to before.

For small and medium-sized enterprises that already have meager profits, this is undoubtedly adding insult to injury. In the first half of 2025, the number of bankruptcies of small and medium-sized enterprises rose by about 15% year-on-year.

In the past, many enterprises could make money simply by relying on "channel relationships" without having to spend effort on research and development. However, under the current anti-corruption storm, the path of "sales with profits" has been completely blocked.

Enterprises accustomed to "quick money" are mostly at a loss when they suddenly have to shift to "technological breakthrough", and can only struggle in the pain of transformation.

三、Where will the Future trend lie?

However, where there are challenges, there are opportunities. I have sorted out three underestimated "incremental blue oceans".

The first one: Home medical care market.

With the intensification of aging, the demand for home-based elderly care and chronic disease management is on the rise. The sales of wearable devices increased by 320% in 2024, and the user stickiness of remote electrocardiogram monitors is three times that of traditional devices.

What is more crucial is the county-level market - the current target for medical device coverage in county-level hospitals is 60%, but many township health centers cannot even be equipped with basic monitoring devices. The gap here is far larger than that in urban tertiary hospitals.

The second one: The "implementation" of AI in healthcare.

Nowadays, many enterprises are Shouting the slogan of "AI+ Healthcare", but few have actually implemented it.

• The accuracy rate of AI-assisted diagnosis of pulmonary nodules reaches 95%, which is even faster than that of senior doctors.

• The family health monitoring system has covered 28% of grassroots patients and can provide real-time warnings of health risks.

However, there is a shortage of over 100,000 AI algorithm engineers in the industry. Many technologies are stuck at the stage of "clinical adaptation" - no matter how advanced the algorithms are, if they cannot solve the actual problems of doctors, they will ultimately be "castles in the air". Enterprises tha

The third one: Going to sea.

In 2024, the export value of domestic medical devices reached 56 billion US dollars. The growth rate of the Southeast Asian and Central and Eastern European markets exceeded 45%, but the international market share of Chinese medical devices was still less than 30%.

With the advancement of the "Belt and Road Initiative", many hospitals along the routes are in urgent need of cost-effective equipment. The advantages of domestic medical devices in terms of price and service can precisely fill this gap.

Just like a portable ultrasound device from a certain domestic enterprise, it directly snatched 30% of Medtronic's market share in Southeast Asia because it was suitable for the needs of grassroots hospitals.

四、Summary

Some people say that the medical device industry is a "forever sunrise industry", but now it seems that this industry has no "comfort zone", only an "evolution zone".

A market size of 2 trillion yuan - only enterprises that can break through core technologies and seize the opportunities of household use and going global can survive the next golden decade. Those enterprises that rely on channels and are reluctant to innovate will eventually be eliminated.

However, although the road to domestic substitution is difficult, it is not without hope. Just like a certain enterprise, it took a full eight years to reduce the import proportion of high-end CT chips from 90% to 30% through independent research and development. Some enterprises have been deeply engaged in the Southeast Asian market and managed to increase their export volume from 100 million to 1 billion within three years.

These cases all prove that as long as one focuses on technology and finds the right track, domestic medical devices will eventually gain a firm foothold in the global market.