Core Components Jump 30% in Price, Soaring Chip Costs Hit United Imaging and Mindray's Gross Margins!

"The cost of a single motherboard has risen by over 1,000 yuan; for now, we have no choice but to absorb this cost pressure ourselves." This is the genuine dilemma confided to VCBeat by an insider at an endoscopy company in 2026. The global semiconductor price surge is sweeping through the medical device industry. Chips, precious metals, hardware components... these raw materials, which had enjoyed stable supply for many years, are collectively triggering a price storm.

Even large-scale industry leaders such as Mindray and United Imaging have successively issued warnings in their financial reports about pressure on gross profit margins. As industry leaders begin to worry about raw materials, the weight of this price hike wave is clearly impossible to ignore.

This round of price increases for upstream electronic components in the medical device industry follows a logic similar to that of the memory chip price hikes in the smartphone sector. The significant allocation of resources toward the AI industry has led to tightness in the medical device supply chain, thereby driving up the prices of upstream electronic components for medical devices.

This round of price increases for raw materials in the medical device industry involves multiple sub-sectors. VCBeat (WeChat ID: vcbeat) has found through statistics from public information that, across sub-sectors including life support and monitoring, in vitro diagnostics, and medical imaging, listed medical device companies have disclosed in announcements that rising raw material prices have directly led to declining gross profit margins.

Patient monitor manufacturers' gross profit margins are under significant pressure, as rising prices for core components squeeze profit margins. For patient monitors priced at tens of thousands of yuan per unit, core components such as the motherboard, IC chips, LCD panels, and various accessories account for a significant proportion of the total production cost.

Data disclosed in Biolight's IPO prospectus shows that the main control board and IC chips each account for 13%–15% of production costs, while accessories constitute approximately 20%. Combined, these three components represent nearly half of the total production cost.

The manufacturing and processing of medical-grade main control boards, parameter modules, and various circuit boards impose stringent requirements on specialized equipment and technical personnel, involving dedicated production lines such as surface mount technology (SMT) machines, reflow soldering systems, and wave soldering equipment. If medical device enterprises choose to build their own production lines, they often face challenges such as high initial investment, insufficient production volume for single product varieties, and low capacity utilization, resulting in poor cost-effectiveness. Therefore, the industry commonly adopts a model combining "outsourced processing, internal debugging and acceptance, and independent assembly": external professional manufacturers are responsible for board processing, while the enterprise itself controls quality debugging and final assembly. This approach not only ensures compliance with quality control standards but also effectively controls fixed asset investments.

However, while this model optimized the manufacturing cost structure, it failed to hedge against the systemic cost pressures arising from rising upstream raw material prices.

This means that any price fluctuations in upstream electronic components will be directly and significantly transmitted to the income statements of downstream medical device companies.

Financial report data shows that the impact of rising prices for electronic components has been clearly reflected in the financial statements of leading companies.

Mindray anticipates that price competition pressure in the domestic market will continue during its performance briefing. Compounded by the rising prices of raw materials such as electronic components, the gross profit margin for the full year is expected to decline to some extent. This means that pressure on the cost side has shifted from industry-level concerns to explicit performance guidance provided by leading enterprises.

The situation at Biolight, one of the top five patient monitor manufacturers in China, is even more telling. As a leading domestic player, Biolight reported revenue of RMB 121 million from its patient monitor products in the first half of 2026, an 8% year-on-year increase. However, operating costs surged by 30.29% compared to the same period last year, directly causing the gross profit margin for patient monitors to drop by 11.58 percentage points year-on-year. The divergence between revenue growth and unchecked cost escalation indicates that rising raw material prices are not merely a mild cost disturbance, but a significant variable capable of reshaping the profitability of individual products.

This wave of price hikes in core upstream raw materials has also swept into the in vitro diagnostics industry. In the first half of 2026, the gross profit margin of Edan Instruments' in vitro diagnostics (IVD) business decreased by 2.67 percentage points. During its performance briefing, Edan Instruments stated that the decline in IVD gross profit margin was primarily driven by two factors. First, the rising cost of raw materials for the blood gas and magnetic sensitivity businesses, covering the entire supply chain price increases including chips, precious metals, and hardware components. Although the company actively mitigates this through process optimization, complete avoidance of cost pass-through is difficult. Second, the hematology business secured bids for several large-scale projects at prices below the standard selling price, which temporarily reduced the gross profit margin of this segment.

In addition to the patient monitoring and in vitro diagnostics (IVD) sectors, the medical imaging industry is also undergoing a broad-based upstream raw material price inflation cycle, with widespread increases in the prices of upstream raw materials for medical imaging.

A domestic supplier of core components for medical imaging told VCBeat that upstream raw materials for medical imaging have risen across the board, especially X-ray tubes, detectors, and medical-grade chips. However, not all categories rose to the same extent, showing clear structural differentiation: imported products saw larger price hikes, while domestically produced ones experienced relatively moderate increases. The drivers behind this round of price surges relate both to the explosion in AI computing power and to rising upstream material costs; meanwhile, growing industry demand for high-end X-ray tubes has also pushed up prices of premium products.

Taking the X-ray tube, a core component of CT scanners, as an example, data from RUNTO indicates that prices have risen significantly. The price of imported 64-slice CT X-ray tubes increased from RMB 500,000–800,000 to RMB 600,000–950,000, representing a 20%–30% increase. Similarly, high-end X-ray tubes for 128-plus-slice CT systems rose from RMB 1,000,000–1,600,000 to RMB 1,200,000–1,900,000, also marking a 20%–30% surge. As one of the most valuable core components in CT equipment, the substantial price increase of X-ray tubes has directly driven up procurement costs for whole-system manufacturers.

The impact of upstream price increases is gradually being transmitted to downstream original equipment manufacturers (OEMs). Based on disclosed financial data, the profitability of medical imaging companies has been affected by the combined pressure of rising raw material costs and terminal pricing pressures resulting from centralized procurement.

Wandong Medical's financial report for the first half of 2026 presents a typical picture of "increased revenue without increased profit": operating income grew by 3.71% year-on-year, while operating costs surged by 20.05% year-on-year, leading to a decline in gross margin. The company admitted in its financial report that, in addition to the "trading price for volume" strategy under volume-based procurement, persistently high core component costs and the yet-to-materialize scale-driven cost reduction effects are key factors jointly dragging down the gross margin. This case clearly demonstrates that against the backdrop of terminal selling prices being locked in by centralized procurement, price increases for raw materials are almost entirely absorbed by the enterprises themselves, severely squeezing profit margins.

As an industry leader, United Imaging Healthcare has maintained relatively stable gross profit margins. In the first half of 2026, its comprehensive gross profit margin was 47.18%, a decrease of 0.75 percentage points compared to the same period last year; among which, the gross profit margin for the equipment business was 46.01%, decreasing by only 0.03 percentage points compared to the same period last year.

However, the management of United Imaging Healthcare has issued a clear warning: in the first half of the year, prices for certain upstream raw materials rose by approximately 2%–3%. The associated cost impacts have not yet been fully reflected in the financial statements, and their lagged effects warrant close attention in the coming year. This implies that the current gross margin figures may not fully reflect the impact of rising raw material costs. Next year could bring a more severe test for gross margins.

United Imaging Healthcare stated that the company continues to strengthen supplier diversification, long-term agreements, dynamic procurement, and safety stock management, thereby maintaining overall stability in the purchase prices and supply of core raw materials.

The erosive effect of rising raw material prices on net profit is gradually becoming apparent. In the medical device industry, where market competition is already intensifying and centralized procurement continues to compress terminal pricing margins, the unexpected surge in raw material costs adds further pressure to an already strained profit chain.

When the mobile phone industry faces rising costs for core components, manufacturers can pass the pressure on to consumers by raising end-product prices. However, medical device companies do not have such flexibility. Against the backdrop of continuously deepening centralized procurement policies, the end-user prices of products are strictly capped, leaving very limited room for price increases; meanwhile, the prices of core components continue to climb, subjecting enterprises to a severe "squeeze from both ends."

Unable to contain costs and unable to raise prices, how can Chinese medical device companies break through? The response strategies of leading enterprises reveal an emerging path: short-term supply chain resilience to buffer shocks, mid-term product portfolio upgrades to expand gross margin space, and long-term pursuit of pricing autonomy in overseas markets.

Strategy 1: Building Supply Chain Resilience. In the face of rising raw material costs, the most direct response is to safeguard the core supply chain. Many companies have stated that they are hedging against supply chain risks and mitigating cost fluctuations by establishing alternative supplier networks, implementing strategic stockpiling and safety inventory management, and signing long-term procurement agreements.

Strategy 2: Premiumization Strategy. As cost compression hits a ceiling, companies are seeking breakthroughs on the revenue side by increasing the proportion of high-gross-margin products and using structural upgrades to offset rising unit costs. The gross margin cushion of premium products is sufficient to absorb more significant increases in raw material prices.

Strategy 3: Seek Profits from Overseas Markets. If moving upmarket represents a "structural breakthrough" in the domestic market, then going global constitutes a "strategic game-changer" that fundamentally frees companies from the pricing constraints of centralized volume-based procurement.

Overseas medical device markets are primarily driven by market-based pricing, granting companies greater autonomy in setting prices. This means that when raw material costs rise, products in overseas markets can pass on these costs through price adjustments, thereby protecting gross profit margins. For domestic companies, overseas business not only represents incremental revenue but also incremental "high-quality profits."

The underlying logic of the medical device industry is undergoing a shift: over the past decade, industry growth relied more on policy dividends and expanding market demand; in the next decade, competition among enterprises will depend more on supply chain control, technological innovation capabilities, and global market expansion capabilities. Rising raw material prices are merely a catalyst for this transition—accelerating the elimination of extensive expansion models and hastening the rise of high-quality, globalized, innovation-driven enterprises.