Korea records surplus in medical device trade for 4th consecutive year

The Korean medical device industry’s trade balance recorded a 587.8 billion won ($450 million) surplus last year, marking the fourth consecutive year of surplus since 2020.

On Tuesday, the Ministry of Food and Drug Safety (MFDS) announced medical devices’ production, import, and export in 2023. According to the ministry, the market size of the domestic medical device industry was 10.27 trillion won last year, recording an annual average growth rate of 8.3 percent over the past five years.

The main features of the medical device production, import, and export performance in 2023 were continued growth in the medical device market size; a decrease in the production and export of in vitro diagnostic medical devices due to the recovery from Covid-19; an increase in the proportion of digital medical device exports; the recovery of the No. 1 position in the production and export of dental implants; and the maintenance of the number of medical device manufacturers, importers, and workers at the previous year's level.

Last year, the total value of medical device production was 11.31 trillion won, down 28.1 percent from 2022. In vitro diagnostic medical devices were valued at 1.18 trillion won (down 80.4 percent) and other general medical devices at 10.13 trillion won (up4.5 percent), which is attributed to a significant decrease in the production and export of in vitro diagnostic medical devices, including Covid-19 diagnostic kits, as the pandemic’s crisis stage was lowered.

The domestic medical device market was valued at 10.72 trillion won, down 9.7 percent from 2022, but up 37.5 percent from 2019, the year before Covid-19. The domestic medical device market has grown at a compound annual growth rate of 8.3 percent over the past five years

In 2023, the production value of in vitro diagnostic medical devices, which has increased steadily since the implementation of the “In Vitro Diagnostic Medical Device Act” in 2020, was 1.18 trillion won and their export was 1.12 trillion won ($860 million), down 80.4 percent and 75.7 percent, respectively, from 2022. This was likely due to the decrease in demand for Covid-19 test kits following last year's downgrading of the Covid-19 crisis stage in May.

The domestic digital medical device market grew from 324.4 billion won in 2020 to 409.9 billion won in 2023. The share of digital medical devices in total medical device exports has been growing for four years. In particular, exports of software-only digital medical devices have grown rapidly, with an average annual growth rate of about 311.7 percent over the past four years.

The production and export value of dental implants (dental implant fixtures and dental implant superstructures) has shown steady growth, with an average annual growth rate of 24.4 percent and 29.9 percent over the past four years.

“Dental implant fixture” lost its position as the top domestic production item in 2020 due to the increase in production of in vitro diagnostic medical devices, including test kits, in response to the Covid-19 pandemic, but regained the top spot in both production and export value last year.

Besides, biomaterials for tissue repair such as “fillers” (26.8 percent), daily wear soft contact lenses (16.5 percent), and dental implant fixtures (9.8 percent) were the items with the highest production growth rate last year compared to the previous year due to the increase in social activities following the recovery from Covid-19.

There were 4,223 medical device manufacturers last year, an increase of 1.1 percent from the 4,176 in 2022. Despite the significant decrease in in vitro diagnostic device production last year, the number of manufacturers and importers totaled 7,186 (4,223 manufacturers and 2,963 importers), similar to the 7,187 in 2022.

The number of employees at medical device manufacturers last year was 89,487, an increase of 0.2 percent from 89,333 in 2022, while the number of workers at manufacturers and importers totaled 144,925, a slight decrease of 0.6 percent from 145,826 in 2022.

“In January, the government enacted the Digital Medical Products Act with the National Assembly to promote the national task of becoming a bio-digital health powerhouse,” the ministry said. “We plan to further strengthen global competitiveness in the digital medical device sector by continuing to lead global regulations and regulatory support for artificial intelligence and software-centered digital medical devices.”

In addition, the government will continue to do its best to develop the medical device industry, including supporting the production and export of medical devices for the globalization of Korean medical devices, the ministry added.