The great reckoning has come for 3D printing, or more precisely, the great reckoning has come for investors betting heavily on 3D printing.
For the past eight years or so, the 3D printing market has enjoyed a nice run-up as public awareness of the technology grew, leading to the development of new printing technologies, new start-ups, new materials, and lower prices. The two industry leaders – Stratasys and 3D Systems – fought each other using acquisitions, and they made the critical error of playing to the crowd, promising 3D printers on every desk and in every kitchen and garage. That didn’t hap-pen. And so the shakeout happened, at least in terms of perception. And, disappointed stock investors have punished the segment.
To say all that, though, is to totally miss the point. While attention has focused on the leading companies and the false promise of consumer 3D printing, investment money has flowed into the industry, spawning R&D leaps fueled by Moore’s Law jet-propelling everything from super- computing to mobile processors and sensors. The additive manufacturing market is richer and more diversified than ever. Analyst Terry Wohlers of Wohlers Associates puts the additive manufacture business at $5.2 billion in 2016, based on research for the company’s “Wohlers Report 2016.”
Wohlers points out that consumer 3D printing is a misnomer, and a true consumer 3D printer does not yet exist. Even so, desktop printers and that low-cost segment are doing quite well. In fact, says Wohlers, most of the 3D printers sold in the last three years – the years of the supposed consumer crash – were low-end printers priced at under $5,000, with an average selling price of $1,055. “Our research shows that an estimated 278,000 desktop machines were sold last year,” he says. At this time, Wohlers is tracking 62-plus producers of industrial 3D printers, in addition to many companies that offer low-cost 3D printers.
However, most of the money is be-ing made at the high end, with indus-trial 3D printers that have an average selling price of $97,370, according to “Wohlers Report 2016.” Currently, in all segments, there is healthy, recur-ring revenue from sales of printers in the form of an aftermarket for materials and services. So far, most of the established 3D printer companies have built proprietary systems around the machines, software, and mate-rials that allow them to control the market for materials and enjoy high margins. The printers using commonly available off-the-shelf materials are more often low-end printers.
Also in the last three years, there have been significant changes that promise further industry shake-up, and as is so often the case, the shake up is coming from standards. In the decades that have passed since the introduction of this technology, there has been an awareness that better formats are needed to translate the digital 3D model to 3D printing machines. CAD vendor Autodesk has called for better 3D printers that are rugged, standardized, and use standard materials. As part of Autodesk’s Spark initiative, the company introduced its own model for a 3D printer in 2014, the Ember.
Companies signing on with Autodesk to support Spark include HP, Microsoft, 3D Hubs, Voxel8, Dremel, and Big Rep. Another major step was the establishment of the AMF file-format standard developed by standards body ASTM Inter-national (American Society of the International Association for Testing and Materials).
Meanwhile, Microsoft set out to develop another file format called 3MF as an alternative to the STL file format. The company used its bucks to form the 3MF Consortium, which is now supported by the ASTM as well. The list of founding members of 3MF includes stalwarts Auto-desk, HP, Microsoft, Dassault Systemes, FIT, GE, Materialize, PTC, Shapeways, Siemens, SLM Solutions, Stratasys, and Ultimaker. The goal for AMF and 3MF is to create a file format that consistently describes a 3D model, including internal information, color, and textures, and could communicate with 3D printing machines. 3MF has made the format available with all its updates on GitHub.
ANALYST TERRY WOHLERS SAYS $5.2 BILLION IS BEING SPENT ON 3D PRINTING PRODUCTS AND SERVICES WORLDWIDE.
Given the wide-scale interest in using 3D printing for more than rapid prototyping, it’s likely that support for 3MF will grow. Additive manufacture technology is rapidly improving to the point where 3D printing for replacement parts and for short-run production is already happening. In order for 3D printing to become practical for mass production, parts need to be manufactured in exactly the same way. That seems sort of a dead-obvious observation, but 3D printers often produce parts with unacceptable variation and inconsistency. One of the requirements driving standards forward is the ability to define how a part is manufactured accurately and repeatably.
In essence, there are three major trajectories for the improvement of 3D printing: pro-cess, price, and materials. Ma-chines have to be developed that are faster, more repeatable, and more reliable. An overnight run to produce one model is tolerable for one-offs and prototypes, but it’s not going to satisfy the needs of production. Low-cost ma-chines are not as important as low-cost production. Machines that can produce parts at a high speed and at a low cost pay for themselves. After all, factories are not inexpensive. And, thus far the cost of proprietary materials is a major factor in the overall expense of 3D printing. There are signs, however, that change is on the way.
NEW PLAYERS, NEW RULES
As of this writing, the additive manufacture business is in a bit of a suspended state as watches what HP is up to. HP has introduced the Jet Fusion printer, which has the potential to change the 3D print industry in much the same way that HP came to dominate the ink jet print-ing world. The company makes a very good case with the Jet Fusion, which, HP says, will be able to combine multiple colors and even material properties in a process HP says is 10 times faster than any printer currently on the market and using mate-rials that are less expensive.
HP says the print heads can lay down mate rial at 30 million drops per second. HP de scribes its printers’ functions in terms of voxels, 3D volume elements of approximately 21 microns (or .02 millimeters) each, and claims parts can be built at over 340 million voxels per second. These are not desktop printers. HP is building two models, the 3200 that accepts 20 kilograms of material and will sell for approximately $120,000, and a faster, larger model that accepts 200 kilograms of material for $200,000. HP is also selling an optional cooling unit, which speeds the post processing of printed parts. The company says the printers are suitable for creating production parts as well as prototypes.
THE HP MULTI JET FUSION PROCESS LAYERS MATERIAL AND TARGETS FUSING AGENTS TO SELECTIVELY FUSE MATERIAL WITH THE EXPOSURE OF LIGHT. THE UNFUSED POWDER CAN BE REUSED.
One of the keys to HP’s strategy is that the company says it is taking an open systems approach to materials. One of its first partners is Arkema, which makes a variety of materials for 3D printing, but HP says there will be other companies developing materials to expand the potential of the Jet Fusion.
Autodesk has essentially wrapped up its Spark initiative, folding all its APIs, services, and sample applications into its Forge Platform, a cloud-based repository for design tools, APIs, and utilities.
Some of the major players with metal 3D printers are meeting the challenge of speeding up the printing pro-cess with additional lasers. EOS is announcing a new large-for-mat printer, the M400-4, which has up to four lasers, to succeed its M400. Competitors Additive Industries and SLM Solutions already have their own multi- laser systems for metal printing.
Early fall is a busy season for 3D printing announcements in advance of the IMTS (International Manufacturing Technology Show) conference in Chicago.
Stratasys has announced two new printer designs in advance of that show. Its Infinite Build prototype has the potential to print a part of variable lengths. Stratasys has turned the printer on its side so that the part is built on the vertical wall of the printer rather than the floor. Stratasys is also introducing a print system that works at the end of a robot arm.
In addition to Autodesk, Siemens is probably the most proactive of the CAD companies in the field of 3D print, which makes sense given its larger business as a manufacturer of industrial products. The company is a customer as well as vendor on several industrial manufacture fronts. Siemens has spent $21.4 million building a 3D printing plant in Finspång, Sweden, to construct spare parts for its turbines so it can offer its customer “rapid re-pair” services. The factory is also used to prototype new designs. (Siemens competitor GE has also built a 3D printing facility to enable production of parts for jet engines, wind turbines, locomotives, and for water treatment.)
Siemens enthusiastically supports a number of printing initiatives, including the large-for-mat Lasertec printer from DMG Mori, which combines additive and subtractive manufacturing. Siemens announced an alliance with DMG Mori in 2016. The Lasertec combines laser deposition welding with a five-axis milling machine. DMG Mori says laser deposition is up to 20 times fast-er than powder bed approaches. The Lasertec machines can alternate between milling and laser deposition, enabling access to internal areas of the part that are inaccessible after the part is completed. Laser deposition enables larger parts to be created, and the hybrid approach also includes turning capability to build large, long parts.
Siemens has also given an approving nod to the HP printer and is a member of 3MF. In fact, Andreas Saar, vice president of Manufacturing Engineering Solutions at Siemens PLM Software, says it’s the evolution of modern formats like AMF and 3MF that enable direct manufacture techniques to be an integrated part of the PLM process. Last year at PLM World, Saar told the audience that older formats, such as STL, are “dumb” formats, which break the PLM cycle. 3MF allows the 3D print process to be better integrated into the design process and perhaps even maintenance on the other end.
In addition to alliances and factories, Siemens has its own experiments in 3D printing, including its kind of adorable Si Spis, spider robots with 3D printing ability developed in Siemens’ Princeton, New Jersey, research facility. The SiSpis are part of a system called Siemens Agile Manufacturing Systems (SiAMS). The plan is that the SiSpis can work collaboratively to create large-scale, complex structures. The team is led by Livio Dalloro, head of product design, modeling, and simulation research at Siemens Corporate Technology.
Make no mistake, though, GE is not about to relinquish terri-tory on the 3D printing front to Siemens. GE also has its own 3D printing factory for print-to-re-pair operations and prototyping. The company has just gotten a whole lot more committed with the announcement of a $1.4 billion investment to acquire ad-ditive manufacture companies Arcam and SLM Solutions.
THE LASERTEC PRINTER FROM DMG MORI IS AN EXAMPLE OF AN ALL-IN-ONE PRINTER COMBINING ADDITIVE MANUFACTURE AND SUBTRACTIVE. IT COMBINES A 3D PRINTER WITH A MILLING MACHINE.
Arcam AB, based in Mölndal, Sweden, invented the electron beam melting machine for met-al-based additive manufacture. It produces its own metal powders and has customers in aerospace and health care. The company reported $68 million in revenue in 2015. SLM Solutions, based in Lübeck, Germany, also produces metal-based additive manufacturing machines and has customers in aerospace, energy, health care, and automotive industries. The company reported $74 million in revenue for 2015.
The acquisition complements the work GE has been doing in material science and additive manufacture, investing over $1.5 billion since 2010. As a result, the company has built services applications for additive manufacture throughout the company. Its choice of metals printing companies is not so surprising either, with the revelation that the company holds 346 patents in powder metals.
The teams from both companies will report to David Joyce, president and CEO of GE Aviation. He will lead the integration of the companies into GE, develop GE’s new business in additive manufacturing equipment and services, and push additive manufacture throughout GE. GE says it expects to grow its new business in additive manufacture to $1 billion by 2020. In addition, the company says it expects the acquisition to enable GE to reduce costs within the company by $3 billion to $5 billion over the next 10 years. Joyce says the technology developed by the two companies is complementary, and he pledges to extend the line of additive manufacturing equipment and products. GE’s Arcam and SLM Solutions’ additive manufacturing operations will remain in Europe.
It no longer makes sense to talk about the 3D print industry as a monolithic technology. It encompasses a multitude of companies developing different processes and materials for additive manufacture, which is why an overview article like this has to leave out considerably more than it includes. However, there are several clear trends that have emerged over 2016 and will affect the companies going forward.
Business as usual is not going to work. HP has entered the market with the intention to own 3D printing, but there’s a little bit of a twist. Back in the day, the company sold its printers for low prices and priced its ink cartridges at a premium. That’s a game plan being copied by the leading 3D printing companies today. The companies have developed proprietary approaches that enable them to restrict the types of materials that can be used in their machines and charge accordingly. It’s not a scalable approach when the opportunity heads toward mass production. And, it is not a tenable position with powerful competitors in the market like HP and GE, but it’s hard to give up a business model.
In the case of HP, its printers are competitively priced and the company is supporting open-source materials. Just like in the old days, HP has its own cartridges – very big cartridges.
It will also be interesting to watch what’s going to happen at 3D Systems. The company bet heavily on consumer systems and also cloud-based printing on demand. When that didn’t pan out, the company fired its CEO, Abe Reichentall, and much of his executive team is no longer at the company. 3D Systems has eliminated its low-, low-end printers, but after an acquisitive binge that raised the company’s revenues and valuation (for a while), the company is left with a deep portfolio of technology and a new CEO, Vyomesh Joshi, appointed in April 2016 to replace interim CEO Andy Johnson.
3D PRINTING CAN CAPTURE THE INTRICACIES OF ANCIENT CRAFTS USING MODERN TECHNOLOGY. THE PIECE HERE WAS DESIGNED BY NICK ERVINCK AND OUTPUT USING A STRATASYS J750 3D PRINTER.
Joshi, known as VJ, is the famous former HP executive who engineered that company’s printer strategy. Under Joshi’s leadership, HP’s printer division has often been a revenue bright spot for HP when other segments looked pretty dire for the company. Now, Joshi’s got something to prove, and he’s got quite a bit to work with at 3D Systems, not to mention a clean slate at the executive level.
The stage is set; 2016 has been a watershed year for 3D printing, with technology and companies aligned for a new round of innovation and sales. Expect new rounds of acquisition and shakeout, but also expect to see even more innovation as the industry continues to diversify. We’ll see the technology go deeper into the markets where additive manufacture already plays a role, and break into new markets.
Kathleen Maher (Kathleen@jonpeddie.com) is a contributing editor to CGW; a senior analyst at Jon Peddie Research, a Tiburon, CA-based consultancy specializing in graphics and multimedia; and editor in chief of JPR’s “TechWatch.”