The evolution of 3D printing (or additive manufacturing) goes as far back as the experimental phases of the 1960s. In the technology world, that might as well be epochs. What started as a fairly rough process of building objects layer-by-layer has now evolved into a widely available and incredibly precise technology — the likes of which are about to disrupt the entire manufacturing industry in a very big way.
Joe Allison, CEO of Stratasys Direct Manufacturing says, “3D printing is changing manufacturing. We don’t mean just revolutionizing the industry. We mean that the technology is literally changing how products are made.”
3D printing builds objects layer by layer as opposed to the traditional subtractive method, whereby materials are cut, ground, or molded to create an object.
Experts in the field of 3D printing are naming 2016 as the turning point year for this technology.
Investors should listen up, because 3D printing is becoming increasingly essential to more industries than you may expect. There is no doubt that this technology will greatly impact any market that adopts it. The opportunities are endless:
We’ll be seeing the impact of 3D printing in both commercial and consumer sectors. Demand for the technology is expanding across in-home applications, but also automotive, aerospace, industrial, and health care sectors. By 2017, sales of 3D printers will exceed $5 billion, an increase from less than $2 billion just four years ago. Commercial printers, which cost up to 20k just a few years ago, now range between 2-5k, making them accessible to the mass market. In fact, some printers now sell for as little as $100.
One 3D printing analyst recently reported, “3D printing will have a greater impact on the world over the next 20 years than all of the innovations from the industrial revolution combined.”
In 2016, that disruption goes mainstream. As cost of 3D production continues to decline, the quality and accuracy of 3D printed products continues to improve. Now, the average consumer is able to produce unique items in the comfort of home.
“At the same cost and quality, 3D printing irreversibly overtakes conventional manufacturing as the preferred method of production.” -Forbes contributor and 3D printing entrepreneur, Rick Smith
This is where we’ll see the most dramatic impact. One of the only reasons that 3D printing has yet to become the primary manufacturing method is due to economies of scale. Up until 2015, mass manufacturing via 3D printing was not cost efficient. The technology was used mainly for quick and affordable prototyping, because the traditional manufacturing process has been consistently more affordable in terms of producing large quantities of a given item.
More recently though, technological advancements in 3D printing are reducing the cost of mass production. This means that 3D printing is transitioning beyond a mere technology solution, to a widespread business solution. Very soon, it will be a household staple.
Think about the evolution of computers. What first started as a handful of large, centralized mainframes is now in the home (or pocket) of almost every person in the country. As the technology advanced, and price points became more consumer-friendly, computing technology became an integral part of our everyday lives.
“Rapid quality and performance innovations across all 3D printer technologies are driving both enterprise and consumer demand, with unit shipment growth rates for 3D printers increasing significantly. The 3D printer market is continuing its transformation from a niche market to broad-based, global marker of enterprises and consumers.”-Gartner Research
If you want to get involved in the front end of this disruptive movement (and you should), we recommend investigating various types of 3D printing technology. There are about seven different techniques, but since we’re here to talk about manufacturing, we’re mostly interested in Electron Beam Melting (EBM).
EBM printers are used mostly for industrial and aerospace applications, as this type of 3D printing is one of the most conducive to production of metal parts. The material used in EBM is a metal powder that melts and forms a 3D part layer-by-layer by means of a computer that controls the electron beam in high vacuum. You probably won’t see these printers in the average home, but they are growing throughout the commercial sector. 700 employees from various manufacturing firms were recently surveyed about the development of 3D printing technology at their places of employment. 84% of those respondents ranked metals as the leader when it comes to which materials they’d like to see developed further for additive manufacturing in the future.
Most industry experts expect additive metal use to double in the next three years. Within 10 years, every commercial airplane will have 3D printed parts on it. In fact, with EBM, you could theoretically 3D print an entire wing. A recent report from Alliance Research named EBM as one of the types of additive manufacturing to experience the most growth between 2015 and 2021.
EBM technology was invented by Arcam AB Inc. (AMAVF), and the company is still the world’s top supplier of additive manufacturing solutions. Arcam trades on NASDAQ OMX in Stockholm but trades OTC in the United States. The company just expanded locations into the United States earlier this year in order to meet growing demand from North American clients. Even better, its EBM technology is patented. Because Arcam deals strictly with industrial metals, it won’t be negatively impacted when large printers like Hewlett-Packard enter the market. It’s the only pure (and profitable) 3D printing play with a reasonable value for such dramatic growth.
However, the rapid growth in 3D printer sales is just one part of this equation. The other point of consideration for all investors should be those manufacturing companies that may or may not be already incorporating (or planning to incorporate) 3D printing into their existing business models. Any investors with holdings in manufacturing firms should do some close investigating. Those firms that are resistant to 3D printing are not likely to be here much longer. Any manufacturers who haven’t started using 3D printing better start soon, or odds are they will fall behind the technological curve. Catching up will not be easy.
“Do not think that you can simply sit on the sidelines and watch. The most disruptive innovations do not ask for your permission. But, they do demand your participation”
-Joe Allison, CEO Stratasys
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