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Medical Suppliers Strike it Rich in Northern California

Connectors, switches and inspection equipment are part of the region's latest gold rush

REGIONAL FOCUS

Medical Suppliers Strike it Rich in Northern California
Connectors, switches and inspection equipment are part of the region's latest gold rush
Corinne Litchfield
Inspection equipment from Visicon Inspection Technologies LLC can be used to find dimensional and surface errors in stents.

California has long been a destination for people looking to make big changes. From early settlers panning for gold in the Sacramento area to entrepreneurs starting up computer businesses in Silicon Valley, the northern region of the state has seen its share of successful ventures. Many of them have been medical manufacturers and suppliers.

Some of these suppliers have their roots in the strong technology industry just outside of the San Francisco Bay Area. Fifty years ago, Wright Engineered Plastics (Santa Rosa, CA; www.wepmolding.com) was founded by a Hewlett-Packard employee who had an idea about how to mold plastic keys for calculators. The firm now offers its services to medical OEMs such as LifeScan and Abbott Diagnostics.

Another company traces its beginnings to the high-tech sector in Silicon Valley. In 1973, Karl Zueger left Fairchild Semiconductor to start up Parmatech (Petaluma, CA; www.parmatech.com), an injection molding firm with clients in the telecommunications, electronics, and medical industries. “Surgical tools need complex, high-quality metal parts,” says DJ Lauck, the company’s sales manager. “Our injection molding process allows us to make intricate, three-dimensional components in high volumes and at a lower cost than metal machining.”

Other medical suppliers came to the area to cut costs. When Southern California’s real estate prices got too high in the 1980s, vacuum furnace maker Thermal Technology Inc. (Santa Rosa, CA; www.thermaltechnologyinc.com) moved north. And as the cost of living in the San Francisco Bay Area skyrocketed, many firms headed further north, and found that several of their employees were willing to move as well. Other companies discovered that being located north of Silicon Valley and San Francisco, in towns such as Santa Rosa, Petaluma, and Napa, attracted potential employees. “Most of my employees were commuting to jobs in the Silicon Valley from Santa Rosa,” says Daniel Freifeld, president of Visicon Inspection Technologies (Napa, CA; www.visicontech.com), a manufacturer of stent inspection equipment.

North Bay innovations and resources find medical OEM customers worldwide

Thermal Technology Inc. builds high-temperature vacuum furnaces for use in laboratories, as well as metal injection molding.

Medical suppliers in Northern California have helped the medical device industry make great strides. The stent inspection equipment developed by Visicon Inspection Technologies can now be found in facilities around the world. “Dimensional, surface, cosmetic, and laser-cutting errors can be inspected using our equipment,” says Freifeld. The FineScan stent inspection system uses a 6000-pixel line-scan camera. The stent is placed on a sapphire mandrel, which is rotated while the camera collects line-by-line images in order to create a complete picture of the stent. The FineScan software then uses pattern recognition to find any defects. “This is a fully integrated turnkey system,” says Freifeld. “All that’s required is for an application engineer to tune the algorithms for a particular stent’s defects.” The company currently has 85 machines in the field.

Maxon Precision Motors makes brushless motors (top) that use high-energy neodymium magnets. The EC-Max unit incorporates an encoder, stainless-steel motor (middle), and gearhead assembly (bottom).

And in the area of molding, Parmatech founder Karl Zueger pioneered the powder injection molding process. He saw a need for a manufacturing method that could produce high volumes of precision metal components at low cost. His patented wax-based binder system uses particles that measure as small as 10 µm. A two-step process is used to remove the plastic from the molded parts. “First, a solvent bath is used to break down the organic polymers added to the metal,” says Lauck. “Then we melt the rest of the binding material using a high-temperature furnace.” As the plastic melts, the metal comes together to form the component. This process has been used to make minimally invasive surgical equipment for Surgrx, a Palo Alto–based medical OEM.

The vacuum furnaces built by Thermal Technology Inc. are used in laboratories nationwide and around the globe. Their equipment can be found not only in material science laboratories, but also in the facilities of Medtronic, Guidant, GE Healthcare, and Varian Medical. “We build between 25 and 50 systems a year that are used for sintering metal and ceramics, as well as for other applications,” says Tom Clappier, vice president of sales and marketing. The furnaces are frequently used to produce components for x-ray tubes.

Precision parts makers from Europe have also made a home in Northern California. Companies that have offices in the region include Maxon Precision Motors (Burlingame, CA), a Swiss manufacturer of motors, encoders, gearheads, and other motion control equipment. Several Swiss-owned connector companies, such as Multi-Contact-USA (Santa Rosa, CA) and Lemo USA (Rohnert Park, CA), have also established their North American sales and distribution offices in the area (see sidebar).

Worker base, economy may drive future growth

Although some Northern California medical device suppliers have challenges in recruiting and retaining employees due to the high cost of living in the area, others are more successful. Barbara Roberts, president of Wright Engineered Plastics, has found the worker base to be very stable. “Our average length of service for our employees is 10 years,” she says. Clappier agrees. “We have a very low turnover rate,” he says.

There is plenty of room for medical manufacturers to grow in the Northern California area. BayBio reports that 34% of active U.S. venture capital firms are located in the Bay Area. Roberts has noticed that several of these companies have invested in local medical OEMs, some of which are customers of Wright Engineered Plastics. “Most of the medical companies we work with are based in this area,” says Roberts. “We’ve helped young local companies get started, and as a result, it’s helped our business grow.”

Copyright ©2006 Medical Product Manufacturing News
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