It’s been hard not to sense a pall over the whole world of additive manufacturing in recent years. Whether it was continued erosion in the share prices of the biggest AM businesses, more bursting of overinflated expectations for what the various 3D printing technologies deliver, or the on-again, off-again efforts at industry consolidation, it seems like it’s been a steady stream of bad news for the whole segment lately.
That can’t take away from what the 40-year-old technology has delivered, and it hasn’t dampened some analysts’ expectations for the future. According to Grandview Research, the global market totaled over $20 billion last year, and is poised for a CAGR of 23.5% between now and 2030. GlobalData foresees the industry reaching $70.8 billion by 2030.
The divergent moods are understandable. Company valuations have taken a beating since the pre-pandemic days of widespread industry hype, even as the underlying technologies have continued to improve and end-use applications have expanded.
“You might describe the times as turbulent,” said Glynn Fletcher, president of EOS North America, a leading supplier of AM solutions for industrial 3D printing. “It was never going to be all smooth sailing. In the last 10 years, there have been lots of tailwinds, and lots of progress made in a short time.”
“Valuations over the last year have imploded,” offered Avi Reichental, founder and CEO of Nexa3D, the private Ventura, California-based provider of 3D printers, software and post-processing equipment. “But this is an industry that in the last decade has experienced robust growth. Analysts expect it to continue. There has been irrational exuberance, with investors jumping into tiny businesses not able to deliver growth and with no path to profitability. The industry is going through doldrums right now and we’re learning a lot of lessons. Companies that do that will be very successful.”
“It was a tough year for everybody last year,” added Dr. Jeffrey Graves, president and CEO of 3D Systems in Rock Hill, South Carolina, one of the world’s largest AM companies. “But the level of interest from customers is up. Capital spending was down because of interest rates and the overall economy, but now things are starting to settle down.”
Ironically, one driver of the optimistic side of the recent wild ups and downs in the industry has to do with tamping expectations. The always-overblown hype that 3D printing would eventually supplant legacy production technologies like injection molding, for example, finally appears to have been put to bed. “Production applications are showing a fit–it’s high-mix, low-volume parts,” explained Scott Sevcik, a former tenured executive at Stratasys, the Minneapolis-based AM corporate giant, who is the newly-minted VP strategy and business development for AM Craft, a startup focused on 3D-printed parts for aerospace applications. “The early hype was like the microwave cookbooks from the 1970s that said you could make anything with them. Eventually everyone figured out they’re not going to do that and realized they have a key role, like heating a Hot Pocket.”
On the face of it, hemming in possible applications and opportunities might seem to be a negative. But with continuing difficulties in world-spanning supply chains, and with lead times for many items now stretching into years, customers are increasingly interested in localized manufacturing and new solutions. “Additive is only 0.1% of the total manufacturing market,” said Rich Garrity, chief industrial business officer at Stratasys. “We think it’ll be a very viable tool in the future. It’s a significant market opportunity.”
“I see almost a renaissance in manufacturing, prompted by the pandemic and supply chain disruptions,” Reichental said. “There’s a real desire to build agility into the process and have manufacturing closer to the end user.”
In his recent book, The Cloud Revolution: How the Convergence of New Technologies Will Unleash the Next Economic Boom, technology forecaster, author and speaker Mark P. Mills wrote, “The top three markets for 3D printers are currently the electronics, aerospace, and automotive industries with each constituting about 15 percent of the total share. The fact that no single application has overwhelming dominance is itself a measure of the broad utility of 3D printers… And the supply chain itself is adapting to a new ‘means of production’ with new kinds and formulations of metal powders and other materials optimized for 3D printing.”
Of course, the whole approach of looking at 3D printing as a monolith leads to confusion and difficulties for customers to get started, which is a challenge AM companies will continue to have to address. The endless mix of 3D printing technologies and materials of production, as well as countless OEMs and software offerings, can make things bewildering for end users. “Customers need a company that can handle all their needs,” Garrity said. “They might work with one, two, or maybe three companies on additive.”
Sevcik agreed. “If we can see partnerships and collaborations, that will be valuable,” he said. “[AM companies] are not going to be sole providers–they’ll have to collaborate with tool and material providers.”
The other option is vertical integration. “We have internal capability to develop polymers,” explained Graves. “The big chemical companies got in and really struggled. You have to tailor the materials to the printer–if you design for 3D printing, you get a really nice performance bump and keep costs down.”
The industry has some significant tailwinds. One is the often-maligned new generation of workers. “These new tools are really being driven by young engineers who grew up on 3D printing,” added Graves. “They’re like the engineers at Tesla, not constrained by old methods of car making.”
Garrity offered a couple of other tailwinds: supply chain resiliency and sustainability. The former, of course, goes back to all the disruptions of the past several years that various industries are still working through. The latter will become a tremendous positive for AM as more and more companies focus on the risks, costs and emissions associated with halfway-around-the-world transportation. “Often overlooked is the imperative to demonstrate a commitment to sustainability and reducing our carbon footprint,” Fletcher said.
Returning industry insider Sevcik likes what he sees in AM now. “Additive has gone through a couple of hype cycles,” he said. “That has washed out some of the companies that have driven the hype. It’s time CEOs should know what additive has to offer–solving supply chain problems and making their companies more efficient.”