Benzinga | Sep 24, 2021 01:25PM EDT

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.