Yaosheng Expands into High-End Medical Devices to Capture the Safety Needle Market
Taiwan's rising star, Yaosheng, has successfully entered the medical safety needle industry and obtained TFDA certification. In the next two years, Yaosheng plans to expand production tenfold to capture the substantial U.S. medical device market as it seeks alternatives outside of China.
Known for producing various types of transformers, Yaosheng reported a profit of less than NT$3 million in Q1 this year, with an EPS of only NT$0.05. Despite this, its stock price has consistently risen, with a market value increase of over NT$4 billion this year, making it a notable small-cap stock.
Localized Production of Medical Safety Needles
Yaosheng's new initiative is its high-end safety syringe, officially certified by Taiwan's Food and Drug Administration (TFDA), with mass production starting in the second half of the year. At the product launch event on May 17 at the Howard Hotel, notable attendees included Presidential Adviser Shen Rongjin, National Policy Adviser He Meiyue, NTU Hematology-Oncology Professor Lin Kaixin, Formosa Plastics Chairman Hong Fuyuan, and other esteemed industry, government, and academic representatives.
Former Vice Premier Shen Rongjin was instrumental in supporting Yaosheng's research and development of safety needles. He recalls that the swift creation of the national mask team during the COVID-19 pandemic taught the government the importance of a local supply chain for critical medical supplies. National Policy Adviser He Meiyue emphasized that the new safety needle design protects healthcare workers from needle-stick injuries and that Taiwan's robust manufacturing supply chain addresses a crucial national security concern.
Yaosheng Chairman Su Hao Xi shared that, despite 30 years in electronics manufacturing, he had limited experience in medical device manufacturing. After the pandemic, he encountered Stefano's team, which held a safety needle patent, and learned about Taiwan's shortage of safety needles and other medical devices. With a daughter who is a doctor, he understood Taiwan's need for a local supply chain. Taiwan has the patents, technology, and R&D talent, yet struggles to compete with China's production costs.
Su Hao Xi began his career as a line worker at Quanta and eventually rose to a manufacturing director position. His 30 years of experience have taught him how to use automation to replace manual labor and reduce costs. Traditional needle manufacturing lines require at least 20 staff; Yaosheng's automated line requires only seven, significantly cutting labor costs.
Yaosheng's safety needle, from Taiwan's patent approval to applications in the U.S. and EU, and the factory's environmental assessments, was completed swiftly, with strong support for medical-grade plastic materials from Formosa Plastics. Su joked that he applied everything he learned at Quanta about manufacturing automation for laptops, servers, and smartphones.
Yaosheng's patented design can fully cover the needle and separate syringe barrel medical materials. (Photo/Photo by Chen Junsong)
Fang Wenhui, Director of Family Medicine at Tri-Service General Hospital, noted that current safety needle designs with side covers still pose risks of needle-stick injuries and are sometimes inconvenient. Yaosheng's patented design addresses these issues and makes syringe disposal easier. NTU School of Public Health Professor Su Xi pointed out that shortages of healthcare staff and frequent needle-stick incidents cause significant psychological stress. Widespread use of Yaosheng's safety needles could help retain healthcare professionals.
According to the World Health Organization (WHO), over 2 million needle-stick injuries occur annually, putting healthcare workers at risk of hepatitis B, C, and HIV. Countries worldwide are enacting laws to support the use of safety syringes to protect healthcare staff. The FDA recently raised awareness of quality issues with Chinese-made medical syringes sold in the U.S., and the Biden administration may increase tariffs on Chinese medical device imports by 50%, promoting a shift away from Chinese suppliers.
Preparing for the Decoupling Trend and Entering the U.S. Market
After securing its footing in Taiwan, Yaosheng's next target is the U.S. With fully automated production, Yaosheng's safety needle costs are lower than those of Chinese manufacturers, creating a decoupling opportunity. Yaosheng's Daxi plant has a production capacity of 500 million units per year, and Yaosheng subsidiary Xuanning Technology's General Manager Dai Xianming revealed that plans for a second plant are underway. An additional NT$1 billion investment is being made to build a 5,000-ping factory in Guanyin, Taoyuan, to increase production, with a target of 5 billion units annually by early 2026, a tenfold increase from current capacity.
Source:Wealth Magazine