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The Medical Flat Panel Detector (FPD) Market Experienced a 4% Increase in Unit Sales in 2020

Cranfield, UK, February 23rd 2022; Written by Bhvita Jani and Graham Cooke: The medical flat panel detector (FPD) market experienced a 4% increase in unit sales in 2020 reaching a market size of just under 70,000 units. However, the market revenues declined by almost 10%, equating to a market size of $2.1 billion USD. Market fluctuations echoed those seen in the X-ray modality markets, with static FPDs used primarily in fixed digital radiography (DR) rooms and mobile DR experiencing  10% year-on-year growth. Growth was driven by healthcare providers globally buying mobile X-ray systems for diagnosis of pneumonia as an indicator of COVID-19. Conversely, the market for dynamic panels, often used for fluoroscopy, surgical and interventional procedures, saw a sharp decline with units falling by 18% from 2019 to 2020 as elective surgeries were postponed or cancelled.

Signify Research predicts the medical FPD market to reach 85,000 units by 2025.  However, as average selling prices are expected to continue to fall, market revenues are predicted to decline.

In 2021, market dynamics shifted with demand for static panels used in mobile radiography declining, as the surplus demand in 2020 had been met during the initial waves of the pandemic. However, as elective procedures returned in 2021, demand for dynamic panels for mobile C-arm and interventional applications subsequently increased. In 2021, unit sales of dynamic panel increased by just under 15%, almost returning to pre-pandemic levels.

Wireless flat panel technology is increasingly adopted globally

Demand for wireless technology is continuing to increase in applications such as fixed and mobile radiography, especially in developed markets where benefits such as increased workflow capabilities are widely recognised. In 2020, wireless detectors accounted for 53% of all FPD unit sales. By 2025, this is forecast to grow to 61%. Physical parameters such as detector weight, extended battery life, and liquid damage protection also play a role in the purchasing process, although these factors are typically a lower priority than image quality and dose reduction. Purchasers are also paying attention to the pixel resolution and detective quantum efficiency (DQE). Manufacturers of FPDs are developing thicker scintillator layers and increasing the DQE level possible with their detectors.

Suppliers of FPDs are developing new products that have reduced scatter, lower noise, higher resolution and require lower dose exposure, a key consideration for healthcare providers and increasingly for patients as well. A combination of these features can reduce the need for retakes and increases clinical precision, enabling imaging departments to perform more efficiently.

Another key consideration when purchasing FPDs is the reliability and durability of the panel. Providers are demanding more robust, reliable panels, with a greater return on investment before replacement is required. As a result of this, providers are requesting service contracts or extended warranties to support increasing the lifespan of the detectors.

Demand for Gadox continues to decrease

Cesium iodide is the gold standard for medical imaging FPDs, but limited demand for gadolinium oxysulfide (Gadox) panels remains. Cesium iodide panels are more sensitive and produce higher quality images than Gadox equivalents, but come with a higher associated cost. The focus on reducing radiation dose in Western Europe and North America is limiting demand for Gadox panels. However, they continue to be sold in some price sensitive markets across Latin America,  . Demand for Gadox detectors is forecast to decrease throughout the forecast to 2025. As the prices of cesium iodide panels become more affordable, these panels are becoming more accessible to a wider range of customers. In addition, as the dose optimisation benefits of cesium iodide FPDs are further acknowleded in emerging countries, this will drive adoption of this panel type. Demand for Gadox panels will be maintained beyond the forecast period by smaller clinics and independent medical imaging facilities where cost is the primary consideration,

Competitive Analysis

The medical flat panel detector market remains a highly fragmented and competitive sector, with 15 vendors having at least a 2% market share each.  Varex leads with 18%, followed by Trixell Thales in second position and iRay in third position completing the top three.

Chinese FPD vendors gained market share in 2020, due to increased production and surplus inventory to supply to mobile X-ray system manufacturers. As a result, companies such as iRay, Careray and PZ Technology increased their market share in 2020.

Chinese FPD companies continue to drive an aggressive price war, forcing international FPD vendors to re-evaluate supply chains and open production facilities in lower cost countries such as China.

In the coming years, a key opportunity for vendors with cost-efficient FPDs is expected to be developing markets, such as Latin America, Africa and parts of Asia. With many of the countries in these regions having large installed bases of analogue or computed radiography systems, there will be ongoing digitalisation as the affordability of digital X-ray systems continues to increase.

Future outlook  

As the low-end FPD market continues to become saturated and the price ware continues, with newer Asian FPD vendors increasing market presence globally, margins for FPD vendors are increasingly at stake. After years of double-digit price erosion, medical FPD prices are forecast to stabalise with only single-digit price annual declines forecast through to 2025. As a result, FPD vendors are progressively investing in research and development to upgrade their product lines to showcase latest hardware innovation and establish a niche. Such developments include IGZO, flexible detectors, photon counting and addition of AEC chambers on the detectors themselves. Target markets for these higher-end FPD products include developed countries and high-end hospitals where clinical precision is still paramount.

Signify Premium Insight: FPDs and Pricing Pressures

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  Senior Market Analyst Bhvita Jani

Senior Market Analyst Graham Cooke

The role that flat panel detectors (FPDs) play in the medical imaging market can be easy to overlook. Unlike the medical imaging systems that are directly promoted to providers through specialist sales channels and trade shows like RSNA, developments in the FPD market are not always as visible. They are an essential component within X-ray imaging systems, and dynamics in this market are facilitating digitalisation globally. However, despite this lack of mainstream coverage, several pervasive trends continue to impact the market away from the spotlight, as highlighted by senior market analyst Graham Cooke and senior market analyst Bhvita Jani in their upcoming report Medical Flat Panel Detector Supply – World – 2022.

“What is important to remember is that a lot of the trends in the FPD market echo the trends for X-ray systems,” highlights Cooke. “Covid has obviously been a big part of that story, so, as in the wider market, 2020 saw a huge increase in sales of mobile systems, which was reflected in a similar increase in sales of static panels. At the same time, with lots of elective surgeries canceled globally, sales of dynamic panels, most frequently used for interventional procedures, fell drastically.

“Now, as the battle against Covid has started to subside, the market has started to rebalance itself somewhat, and sales of dynamic panels for interventional equipment are starting to increase once again, and sales of static panels are coming down to where they were before the pandemic.”

The Chinese Contingent

As with the broader medical imaging market, however, the market disruption caused by the Covid pandemic has taken place against the backdrop of wider, more sustained trends. One of the most notable in the flat panel detector market is the continuing rise of Chinese vendors, and the impact that they are having on the wider global market. The most noticeable effect of the rise of iRay and other such vendors is on pricing. The report forecasts that globally, unit sales will increase by almost 20% between 2020 and 2025. However, over the same period, the revenues taken from these sales will decrease around 12%, from $2.06bn to little over $1.81bn. While a readjustment from the pandemic will impact revenues to some degree, with mobile X-ray being a key diagnostic tool in Covid care, the decline is predominantly a result of Chinese vendors being increasingly aggressive and depressing the average FPD selling price. Resultantly the average selling price of a detector is set to fall more than 25% between 2019 and 2025.

Despite a rapid increase in sales volume, revenues are expected to fall significantly over the forecast period

“This trend has been so significant, and there has been such a level of competition that margins have been jeopardised,” explains Jani. “So large, market leading multinational vendors, such as Varex, for example, have been forced to re-evaluate their supply chains, source components from less expensive suppliers, and even open manufacturing facilities in China to keep their costs down.

“This all reflects how hard it is to compete with some of the Chinese vendors. In the past there have been concerns about the reliability of the Chinese brand detectors, and the quality of the detectors from some vendors has been very poor. However, more recently the leading Chinese vendors are making good progress, they have improved the quality and reliability of their panels, allowing them to make much more of a global footprint, and they are taking market share.”

Budget Bloodbath

This encroachment will have the greatest impact at the lower pricing tiers. “One of the real opportunities for flat panel detectors over the next few years is in developing countries, where analogue and computed radiography technology still has a sizable installed base,” Cooke emphasises.

“Over time, these analogue X-ray systems in emerging countries will continue to be replaced by digital technology, giving X-ray vendors a chance to sell either new digital systems, or retrofit kits, as providers make the switch.”

These markets, which have not yet fully transitioned to digital radiography are markets where affordability is often providers’ primary concern, and so represent prime opportunities for lower priced Chinese FPD vendors. One way in which the established market leaders can defend their position is at the higher price tiers and in the more advanced markets.

“One way the FPD market will evolve in the next few years is we will see increasing consolidation. The most innovative smaller FPD vendors could become acquisition targets for some of the largest players in the market. Those that lack unique capability, on the other hand, could be forced to retreat” opines Jani. “We have already seen this to a degree, as one of the bigger acquisitions in recent years was Varex’s acquisition of Direct Conversion, which specialises in photon counting.

“Larger imaging modality vendors are set to develop photon counting technology in house, and there have already been acquisitions to this end, with GE and Canon, which have bought Prismatic Sensors and Redlen Technologies respectively. However, the smaller players are likely to forge partnerships in order to target the PCCT market.”

Decision Maker’s Moves

Another of the major changes impacting the flat panel detector market, as well as the broader medical imaging market is the fact that purchasing decisions are being made by personnel higher up in a provider’s management structure. Instead of purchases being made by the head of an imaging department, for example, they are more frequently being made at an executive level, often as part of a much broader and much more holistic deal.

“As such, though there is often great innovation when it comes to the clinical benefits, even in the developed markets the decision is often based on cost, durability and reliability,” notes Jani. “So, where the high-end players may be putting themselves in a difficult position, is if they are becoming too specialised and too fixated on the high-end solutions.

“The decision makers at financing departments, procurement departments and group purchasing organisations that are driving the decisions are unlikely to appreciate some of the clinical features of specialised, high-end systems. Or, more simply, their hands may be tied in terms of how much budget is available.

“This means that advanced capabilities and features may not have as much benefit on sales, even in developed markets, because a lot of decisions are still being made based on cost. So, ultimately, I think the FPD manufacturers which will most successfully increase their market share over the upcoming three to five years, will be the low-end panel manufacturers, particularly the Asian manufacturers, because they are going to have the most success in the highest growth markets.”

Targeting a Niche

This cost competitiveness is, more than any other single factor, likely to cause FPD vendors headaches over the coming years. But there are ways in which these vendors can give themselves an advantage. “These vendors need to find themselves a niche,” suggests Cooke.

“Further, they need to find a niche that works for them. That does offer considerable benefits and offers high quality at the right price point.”

One niche which could be successful is AI. Larger modality vendors are increasingly adding AI tools to enhance their imaging systems, with tools available for diagnosis and decision support, as well as workflow tools and image enhancement solutions. Smaller vendors may not have the resource to develop comparative systems, so AI tools included with the FPD could make a material difference.

“This link between hardware and software is already happening,” Jani explains. “While there are significant developments being made in R&D departments, at present, commercially available hardware is very comparable in terms of its image quality and other physical specifications.

“So Vieworks, for instance, must showcase the latest imaging software, which includes AI solutions for chest X-ray diagnosis support. I think the vendors will be more focused on software rather than hardware, because they can compete on hardware, but the added value will come from software.”

There is, however a caveat to this trend, continues Jani.

“Due to flat panel detector vendors’ margins being severely jeopardised in previous years through hardware sales alone, software may play a fundamental role in providing an alternate and more profitable revenue stream. Uptake of such software is restricted however to high-end facilities in developed markets, such as the United States and Western Europe, where clinical precision still holds some precedence.”

Ultimately, for many vendors the flat panel detector market could be a challenging place to be for the coming years. Although unit shipments are set to increase significantly, revenue growth is for the most part, expected to be low single digits at best as vendors engage in pricing wars. The decline in average selling prices of systems may have lessened from its peak, but with annual falls of mid-single-digit percentages, that news will be limited salve for vendors.

Although revenues are set to grow for some categories, the overall picture is underwhelming

Innovation to the Rescue

More positively, it is a market rich in opportunity and innovation, as Cooke points out. “There will be more feature developments from detector manufacturers, using software to enhance the image processing capabilities, dose tracking, the storage of images on the detectors, for example. Other developments are also in the works; long length imaging to enable spinal images without stitching, not to mention upcoming hardware optimisations such as flexible TFT substrates and IGZO panels.”

Flexible FPD panels consist of a structured layer of amorphous selenium on a flexible thin film transistor and offer high image quality, while offering better damage resistance than the ubiquitous glass panels. IGZO panels, meanwhile, combine the strengths of both of the most common types of FPDs on the market today. These include the strong switching performance of TFT panels, as well as the high-resolution capabilities of CMOS panels.

However, as Jani highlights “market potential of hardware innovation, such as IGZO and flexible detectors, has been slower than anticipated by FPD vendors.”

“Despite FPD vendor marketing being evident, unless imaging OEMs are openly requesting or endorsing such technology uptake is restricted, Siemens’ endorsement of photon counting CT, for example.

“As a result, FPD vendors are increasingly trying to push awareness of such hardware features direct to end users and clinicians, which reap the most benefit. As with photon counting, despite the clinical and diagnostic benefits of hardware innovation, the initial higher price premium will hinder market penetration.”

Whether any of these developments will gain traction over the longer term remains to be seen, but their imminent approach means that, for larger Western vendors, there are at least new tools on the horizon to address the pricing competition. Chinese vendors continue to be a big threat, but with these new tools emerging, higher-end vendors will have a bigger arsenal in the fight to keep their place at the top of the pack.

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