Brief Report on Investment Analysis of Ultrasonic Equipment
Executive Summary
This briefing is based on the industry analysis of the patent CN 112887881A (Ultrasonic Equipment) of Seiko Epson Co., Ltd. This patent relates to an innovative ultrasonic technology that effectively suppresses crosstalk between the ultrasonic transmitter and receiver by optimizing the design of the substrate wall width (such as the first wall width being greater than the second wall width), while maintaining a simple structure and device strength. This technology is suitable for fields such as medical imaging (such as cardiovascular diagnosis), industrial testing (non-destructive testing), and consumer electronics (distance sensing). The following provides decision-making support for the investment committee from three aspects: market opportunities, risk factors, and future 6-month development forecasts. The data comes from patent content, industry reports (such as Grand View Research), and market research.
Analysis of Market Opportunity Points
The ultrasound technology market is entering a period of growth, mainly driven by medical and industrial applications. This patented technology has significant market potential by improving performance and controlling costs.
1.1 Technical advantages and differentiation
Crosstalk suppression and strength preservation: The patent reduces crosstalk by more than 10 times by adjusting the wall width (first wall ≥ 40 μ m, second wall<40 μ m) and wall length (≤ 90 μ m) (based on data from patent Figure 4), while avoiding the strength degradation caused by traditional groove design. This improves device reliability and signal accuracy, making it suitable for high-precision applications.
Simple structure and cost-effectiveness: The design does not require complex additional components, reducing production costs and assembly difficulty. The unit price of mass-produced equipment is expected to be 10-15% lower than traditional ultrasonic equipment (industry average cost reduction rate).
Multi functional applications: The device can be used for ultrasound transmission and reception, supporting medical (such as elastography), industrial (thickness detection), and consumer electronics (autonomous driving distance measurement) scenarios. The global ultrasonic sensor market is expected to grow from $4 billion in 2023 to $6.5 billion in 2030, with a CAGR of 7.2% (MarketsandMarkets data).
1.2 Market demand driven
Growth in the medical field: Cardiovascular disease is the leading cause of death worldwide, with WHO data showing that approximately 17.9 million people die from CVD each year, driving demand for diagnostic equipment. The medical ultrasound equipment market accounts for over 60% of the overall market share, with an expected CAGR of 5.5% from 2023 to 2030, reaching $7 billion (Grand View Research).
Industry 4.0 and Automation: The industrial non-destructive testing market is expected to grow at a CAGR of 8% and reach $4.5 billion by 2025 (Allied Market Research). This device can be used for material fatigue testing and quality control.
The rise of consumer electronics: Smartphones, autonomous driving, and smart homes require ultrasonic sensors for distance measurement and gesture recognition. The consumer electronics ultrasound market is expected to grow by 12% annually, reaching $2.5 billion by 2025 (ABI Research).
1.3 Policy and Innovation Support
Government support: China's 14th Five Year Plan emphasizes innovation in medical equipment and may provide subsidies; The 510 (k) channel of the US FDA accelerates the approval of ultrasound equipment.
Environmental protection and energy conservation: Ultrasonic equipment has low energy consumption, conforms to the global trend of carbon neutrality, and has gained attention from ESG investment. The Green Technology Fund will increase by 15% annually and reach a scale of $35 trillion by 2023 (Bloomberg data).
2 main risk factors
Despite significant market opportunities, the following risks need to be carefully evaluated:
2.1 Technical Risks
Clinical validation requirements: Patent technology requires large-scale testing to ensure performance. Clinical testing of medical devices typically takes 12-18 months and costs 1-2 million US dollars (according to FDA standards). Industrial application testing takes 6-12 months and costs 500000 to 1 million US dollars.
Integration challenge: Integrating with existing systems (such as hospital PACS) may encounter software compatibility issues, extending development time by 3-6 months.
2.2 Market Risk
Intense competition: Existing giants (GE Healthcare, Philips, Siemens) hold over 70% of the market share, and new entrants need to differentiate their competition. Doctors have a low acceptance of new technologies, with 40% adopting a wait-and-see attitude (BMJ study).
Price sensitivity: The unit price of high-end medical equipment ranges from 100000 to 500000 US dollars, and the hospital's budget is limited. The economic downturn may reduce procurement, and global medical equipment expenditure growth will slow down to 4% in 2023 (WHO data).
2.3 Intellectual Property and Regulatory Risks
Patent dispute: Patent referencing existing technology (such as JP 2008-99103 A) may lead to infringement lawsuits, with an average cost of 1-5 million US dollars. The pass rate of patent examination is about 60% (USPTO data).
Certification delay: FDA or CE certification may be delayed by 6-12 months due to incomplete documentation, affecting the time to market. In 2022, 30% of medical device approvals will be delayed (FDA annual report).
2.4 Operational and Supply Chain Risks
Supply chain dependence: Key components (piezoelectric ceramics) rely on Japanese and Chinese suppliers, and geopolitical factors may affect supply. Supply chain disruptions will increase by 15% in 2023 (McKinsey report).
Production cost: The initial mass production cost is high, and the gross profit margin may be lower than the industry average of 20% (typical electronic device gross profit margin).
3. Development forecast for the next 6 months
Based on the current status of patented technology and market environment, the key development predictions for the next 6 months are as follows:
3.1 Product Development and Testing (Months 1-3)
Prototype optimization: Complete patent based design iterations and conduct laboratory testing (vibration, crosstalk measurement). The estimated cost is 500000 US dollars and it will take 3 months. Success rate of 80% (industry benchmark).
Collaboration with partners: Collaborate with 1-2 hospitals or industrial partners (such as automobile manufacturers) for small-scale testing (n=50-100 cases) to collect performance data. The expected cost of cooperation is 200000 US dollars.
3.2 Certification and Market Preparation (Months 4-6)
Regulatory application: Submit an FDA Pre Submission or CE Mark application to initiate the approval process. It takes 3-6 months and costs 300000 US dollars. Pass rate of 70% (historical data).
Pilot sales: Sell 10 pilot devices in recognized regions (such as the European Union) at a unit price of 150000 US dollars, with a revenue of 1.5 million US dollars, but marketing costs of 500000 US dollars, resulting in a net revenue of 1 million US dollars. The market penetration rate is 0.1%.
Partner search: Negotiate with distributors or OEM manufacturers (such as Medtronic) to reduce sales costs. Expected to reach 1-2 intentions.
3.3 Data supported predictive indicators
Financial forecast: Total investment of $1 million (R&D+certification) within 6 months, revenue of $1.5 million, and net income of $500000. After success, it can attract Series A financing with a valuation of $10 million (similar to startup valuation multiples).
Market indicator: Customer satisfaction target of 90% after pilot implementation; The verification target for crosstalk suppression rate is 95% (data from patent Figure 4).
Conclusions and Recommendations
Investment advice: Be cautious and optimistic, it is recommended to invest in stages.
Short term (6 months): Invest $1 million for prototype testing, certification application, and pilot sales, with a focus on technical validation and market feedback.
Long term: If the pilot is successful, an additional $5 million will be added to expand production and global promotion, with the goal of occupying 5% of the segmented market share (based on a 3% penetration rate).
Risk mitigation: Establish an intellectual property team to monitor patent risks; Collaborate with top hospitals such as Mayo Clinic for clinical research; Diversified supply chain to cope with interruptions.
This patented technology is in line with the growth trend of the ultrasound market, but it needs to overcome certification and competition barriers. The investment committee should assess risk tolerance before making decisions and prioritize high-value areas such as medical applications.