Kunshan Yiyuan Medical Secures New Funding Round Led by Sunshine Ronghui Capital to Accelerate Domestic CT Tube Production

Recently, Kunshan Yiyuan Medical Technology Co., Ltd. completed a new round of financing, with exclusive investment from RHC (Riverhead Capital). As a game-changer in the research, development, and production of domestically manufactured CT X-ray tubes, Kunshan Yiyuan is the first Chinese company—and currently one of the few—capable of mass supply. Following this round of financing, the company will accelerate its mass production schedule and expand the R&D of additional CT X-ray tube models to meet broad market demand.

Kunshan Yiyuan Medical Technology Co., Ltd. was founded in May 2018 in Kunshan, Jiangsu Province, evolving from the CT X-ray Tube Project Department of Kunshan Guoli Electronic Technology Co., Ltd. Leveraging Guoli’s 40-year industrial platform for electron vacuum technology integrated with military and civilian applications, the company began R&D on medical CT X-ray tubes in 2013. In 2016, it undertook a key project under the National Ministry of Industry and Information Technology’s (MIIT) Industrial Foundation Strengthening Initiative, successfully passing the national acceptance review organized by the MIIT in 2019 with high scores, and was recognized by the MIIT as“This marks a breakthrough in China’s monopoly by foreign giants on the X-ray source, a core component of high-end CT scanners, providing crucial support for precise diagnosis accessible to the Chinese public.”

CT X-ray tubes, detectors, slip rings, and high-voltage generators are core components of CT imaging equipment,The underlying principle involves using X-rays to scan cross-sectional slices of a specific thickness within the examined area of the human body. The CT X-ray tube emits X-rays, and detectors capture the attenuation values of X-rays passing through human tissues in various directions within that slice. These signals are converted from analog to digital format and input into a computer, where processing generates reconstructed CT images. The CT X-ray tube is a key component and high-value consumable of CT equipment. Not only do original equipment manufacturers (OEMs) need to install CT X-ray tubes during the assembly of new machines, but there is also substantial demand for maintenance and replacement throughout the operational lifecycle of CT devices.

CT X-ray tube is a key component in CT equipment for generating X-rays,Its performance directly impacts CT image quality, and CT X-ray tubes are costly—accounting for over 25% of the bill of materials (BOM) cost of a complete CT system in the new equipment installation market. China’s CT equipment market is in a phase of rapid development, with the number of newly installed CT units growing continuously at an annual rate of approximately 15%. During the COVID-19 pandemic in 2020, CT imaging became a critical basis for disease diagnosis, further driving market demand. In that year, nearly 5,000 new CT units were installed in China, corresponding to a market size of approximately RMB 2 billion for CT X-ray tubes in the new equipment installation segment.

Sources: CNKI, EqualOcean, RHC Research

The warranty period for X-ray tubes from the foreign brand Dunlee is 200,000 scan seconds of exposure or one year of use, while the average lifespan of CT X-ray tubes ranges from 300,000 to 400,000 scan seconds. Due to the high frequency of CT equipment usage in China, an average of one X-ray tube needs to be replaced every 18 months. The cost of maintenance and replacement for CT X-ray tubes is also substantial. With the installed base of CT equipment in China reaching 30,000 units, the corresponding market size for maintenance and replacement is approximately RMB 8 billion. Considering both the initial installation market for new CT scanners and the existing market for CT X-ray tube repair and replacement, the total market size for CT X-ray tubes in China approaches RMB 10 billion.

Causes and Solutions for CT X-ray Tube Failures

Source: CNKI, RHC Research

Market Size and Sales Volume Forecast for CT Equipment in China (Sales Revenue: RMB 100 Million / Sales Volume: Units)

Source: Neusoft Prospectus, RHC Research

The challenges in the research, development, and production of CT X-ray tubes are primarily reflected in mass-production uniformity. The main steps in tube manufacturing include insert assembly and tube component assembly. Key processes for insert assembly encompass surface treatment of components, cathode filament assembly, anode bearing and target disc assembly, and dynamic balancing adjustment. The workflow for tube component assembly includes envelope assembly, welding, leak detection, evacuation, baking, housing assembly, aging (seasoning), and cyclic oil filling. The entire assembly process takes approximately seven days.

Even with complete design blueprints for CT X-ray tubes, actual production still requires prolonged technical exploration and process refinement. Manufacturing steps such as component surface treatment, dynamic balancing, welding, vacuum evacuation, and tube seasoning demand substantial accumulation of know-how and rely heavily on the extensive process expertise of production engineers. Maintaining a stable yield rate is extremely challenging. Due to the high raw material costs and low yield rates during research, development, and production, the process of process exploration requires significant upfront capital investment. Consequently, this market has long been monopolized by foreign manufacturers, including established original equipment manufacturers (OEMs) such as GE, Philips, and Siemens, as well as veteran third-party CT X-ray tube manufacturers Varex and Dunlee.

Competitive Landscape of the CT X-ray Tube Market: Initial Installation vs. Aftermarket Services

Source: Varex and Dunlee official websites; RHC Research

Meanwhile, driven by the rapid technological iteration of complete CT systems, CT manufacturers have developed diversified requirements for technical specifications of CT X-ray tubes, such as heat capacity, anode heat dissipation rate, and service life. Foreign companies have conducted in-depth exploration into advanced technologies including flying focal spot technology, liquid metal bearing technology, and direct cooling, thereby establishing high technical barriers.

Since 2015, national policies have encouraged the localization of core components such as CT X-ray tubes to reduce reliance on foreign products. The Ministry of Science and Technology’s pilot special project on “Research and Development of Digital Diagnostic and Therapeutic Equipment” has included CT X-ray tubes within its scope of support, and the Ministry of Industry and Information Technology has also listed CT X-ray tubes in its Special Project for Strengthening Industrial Foundations for Industrial Transformation and Upgrading, explicitly supporting engineering-oriented projects.

With over 40 years of extensive experience and expertise in the manufacturing of vacuum devices, the company boasts a multidisciplinary R&D and production team. Currently, the company employs 80 staff members, including 39 R&D technical personnel (3 with doctoral degrees and 15 with master’s degrees) and 15 technical consultants. Their expertise spans electro-vacuum technology, simulation science, mechatronics, electronic engineering, mechanical design and manufacturing, electrical automation, and materials science. Most core team members have previously worked in the R&D and production departments of foreign enterprises such as Philips and Siemens, bringing rich experience in X-ray tube anode assembly, cathode assembly, envelope design, tube component assembly, high-voltage simulation, and lean production. The company has established a closed-loop process improvement management system that covers drawing design, project transfer, process optimization, production assembly, quality control, and continuous process enhancement.

Leveraging its profound technological expertise and the execution capabilities of its multidisciplinary team, Kunshan Yiyuan Medical Technology Co., Ltd. pioneered the breakthrough of technical barriers to mass production of CT X-ray tubes. In 2019, the company obtained the medical device registration certificate for its 5.3 MHU CT X-ray tube. Following certification, the company continued to refine its manufacturing processes, successfully overcoming the technical constraints for large-scale mass production of CT X-ray tubes in 2020, thereby initiating batch production and sales.

On March 17, 2020, the 5.3 MHU CT X-ray tube manufactured by Kunshan Yiyuan Medical Technology Co., Ltd. was included in the Fifth Batch of Urgently Needed Medical Equipment for COVID-19 Prevention and Control, published by the China Association of Medical Equipment. During the pandemic, the product was urgently installed and utilized in numerous hospitals. Its image quality and operational stability were comparable to those of similar international products, earning high recognition from a wide range of hospitals. The company’s 5.3 MHU CT X-ray tube was selected for inclusion in the Fifth Batch of Urgently Needed Medical Equipment for COVID-19 Prevention and Control by the China Association of Medical Equipment.

The above is a display of some CT tube products from Kunshan Yiyuan Medical.

5.3 Since obtaining certification for its 5.3 MHU CT X-ray tube products, the company has continued to strengthen product quality. The R&D and process engineering department broke down the manufacturing process into over 800 key control points, verifying each one individually and issuing corresponding reports. This effort identified more than 170 critical issues requiring improvement. Between 2019 and 2020, the R&D and process engineering team dedicated full efforts to addressing these issues, systematically resolving each critical point. As a result, both yield rates and return rates now rival those of imported brands. Since 2020, shipment volume has exceeded 150 units. The company continues to increase R&D investment and actively expand its product lines. Four new products—3.5 MHU, 4 MHU, 5 MHU dual-focus, and 8 MHU—are currently in the stage of responding to supplementary requests from the National Medical Products Administration (NMPA) for registration. Registration certificates are expected to be obtained sequentially before December 2021. The 6.3 MHU product has also completed design, with market launch anticipated in 2022. Once all six CT X-ray tube models are commercially available, they will meet 90% of the X-ray tube model demands of domestic CT scanner manufacturers.

The company currently has an annual production capacity of 1,000 units. With over 10,000 square meters of R&D and manufacturing facilities under construction and scheduled to be completed and operational by the end of this year, the company will achieve an annual production capacity of 7,000 CT X-ray tubes, accounting for more than 70% of the domestic production capacity for high-heat-capacity X-ray CT tubes.

Mr. Zhang Lanyong, Chairman of Kunshan Yiyuan Medical Technology Co., Ltd., expressed his gratitude and welcome to the new shareholders. He stated that Kunshan Yiyuan has always adhered to a low-profile and pragmatic operational style, as well as a corporate spirit centered on truth-seeking and innovation. The company deeply understands that product excellence is paramount and that internal strength is essential for success. By refining its products with precision and detail, Kunshan Yiyuan aims to build itself into a specialized, refined, distinctive, and innovative enterprise that is small yet beautiful. Currently, the company has taken the lead in breaking through the technical bottlenecks associated with the mass production of CT X-ray tubes, filling a domestic gap and achieving import substitution. This accomplishment has addressed the issue of self-reliance and controllability regarding core components of high-end medical equipment, which had previously been a critical vulnerability for the country. The product quality has received widespread acclaim and recognition from customers. In the future, we will further consolidate product quality, increase production capacity, and simultaneously develop a variety of new products to meet market demands, working together with the industry to promote the wave of localization for CT X-ray tubes in China.

Mr. Shi Shenghao, Partner at RHC, stated that RHC is honored to participate in this round of financing for the company, supporting technological breakthroughs in domestically produced CT X-ray tubes. RHC has long focused on overcoming bottleneck technologies in core medical components, believing that the localization of core components for large-scale imaging equipment is essential to achieving true domestic production of complete systems. Currently, all CT X-ray tubes are imported, and the barriers to mass production are extremely high. Leveraging its profound technical expertise and a multidisciplinary R&D and mass production team, Kunshan Yiyuan Medical Technology Co., Ltd. has taken the lead in breaking through the mass production technological constraints for domestic CT X-ray tubes. We look forward to the company continuing to lead the CT X-ray tube industry and providing the market with more high-quality products!

Kunshan Yiyuan Medical Technology Co., Ltd. was founded in May 2018 in Kunshan, Jiangsu Province, evolving from the CT X-ray Tube Project Department of Kunshan Guoli Electronic Technology Co., Ltd. With over 40 years of accumulated expertise in vacuum device manufacturing, the company boasts a multidisciplinary R&D and production team spanning electric vacuum technology, simulation science, mechatronics, electronic engineering, mechanical design and manufacturing, electrical automation, and materials science. Most core team members previously held R&D or production roles at multinational corporations such as Philips and Siemens. In 2019, the company obtained medical device registration for its 5.3 MHU CT X-ray tube. By 2020, it had overcome technical barriers to mass production, initiating batch manufacturing and sales. The company’s current annual production capacity is 1,000 units. With over 10,000 square meters of R&D and production facilities under construction, the company will achieve an annual production capacity of 7,000 CT X-ray tubes, accounting for more than 70% of China’s domestic production capacity for high-heat-capacity X-ray CT tubes.

RHC was established in January 2015 as one of the first private equity fund management companies in China’s insurance industry to be initiated and set up with insurance capital. With assets under management reaching RMB 30 billion, RHC focuses on investments in the healthcare and emerging technology sectors. Its portfolio includes star enterprises such as Mindray Medical, Ruipeng Pet Hospital, InnoCare Pharma, Lepu Biopharma, Sinocare, Silicon-Based Bionics, Qichensheng, Saint Sunshine Dental, Chaoju Eye Care, Kuanteng Medical, Tainuo Mabpharm, Huaxin Medical, Kunshan Yiyuan Medical Technology Co., Ltd., SenseTime, Full Truck Alliance, QingCloud Technologies, Enflame Technology, InnoGrit Technology, Qitan Technology, AInnovation, Moore Threads, and Dream Ink.