The best thing to happen to the 3D printing industry is the current dishevel, litigation, and losses. There has been a lot of buzz about acquisitions and mergers, which has now evolved into talk of litigation and hostile takeovers (3D printing industry gripped by intrigue, litigation and churn | Financial Times (ft.com)). Many who follow the 3D printing industry (which is a misnomer, but I’ll address that later), are closely following the news. It’s not often that we witness such corporate action and drama among multiple major players. Think Meta, Twitter, Microsoft, and Apple are all trying to acquire each other and fighting it out…
Let me quickly give you some background for those not familiar with what’s going on. Stratasys, founded in 1989, and 3D Systems, founded in 1986, are two of the oldest 3D Printer manufacturers. 3D Systems has pursued a growth strategy through acquisitions and has acquired numerous companies since 2001. Stratasys, while also undergoing a few corporate-level transactions, has maintained a dominant position in the market for polymers and super polymers for decades. There have always been other smaller players in the industry such as Concept Laser, EOS, SLM and others. If we fast forward to the 2010’s we then saw a plethora of new 3D printer manufacturers come up as patents over the technologies were lapsing. Then, in the 2020s, the rise of SPACs (Special Purpose Acquisition Companies) occurred. The allure of going public and raising substantial amounts of cash attracted several manufacturers of 3D printers and we saw companies like Desktop Metal, Velo3D, and Fast Radius, go down that route. The managers of these SPACs, along with bankers and other involved parties, packaged these companies as tech companies rather than manufacturers to achieve the valuations required. As with most of the SPACs at the time, the valuations were crazy.
Some of companies that went public via SPAC’s were valued at 10 times or more projected 2026/27 revenues. These valuations were and continue to be unsustainable for companies that move boxes, i.e., manufacturers of machines. By end of 2021, we saw the stock prices of those companies come back to earth and that triggered the new wave of consolidation and acquisitions taking place today. This is great news for users of 3D printing, and here’s why.
The adoption of additive manufacturing (AM) has been hindered by several obstacles, including the cost of machines, limited range of materials, software limitations, and a lack of optimized use cases and parts for AM. Fortunately, many of these challenges are gradually being addressed:
- The cost of AM machines has been dropping rapidly and new versions are coming out faster and more efficient.
- Material science advancements have significantly expanded the range of available materials.
- Use cases and application of AM across industries is starting to ramp up, and companies such as Immensa are focused on digitization and redeveloping of existing parts to be viable for AM, thus expanding the universe of parts ready for 3D printing.
- Software companies such as Dassault Systems, Autodesk, and Ansys have all started incorporating AM functionality into their design and simulation programs.
However, a major challenge still stems from the manufacturers of 3D printers. To this date, all the industrial AM system manufacturers insist on using their own operating systems for their machines. This poses a significant issue for end-users. Imagine if each computer manufacturer used its own operating system: Dell, IBM, Apple, Lenovo, and so on. Currently, when a company develops a functional part to be 3D printed (not a prototype or model), it is optimized for a specific brand of machine and is not easily interchangeable. To parallel that in terms of computers, every time a company develops software, they would need to reprogram it to brands like Dell, Lenovo, HP, and so on. Today, whenever Immensa additive manufacturer develops a part on its GE Additive machines, to produce it on another brand such as EOS, our engineers must tweak and redevelop it to match the parameters of EOS. This requires requalifying the part and testing it all over again, which is impractical and not feasible.
I have always been of the conviction that we will end up with two or three dominant operating systems, while the rest will have to adopt them, similar to Windows, iOS, and Linux in the computer industry.
In conclusion, the current dishevel being talked about will result in significantly higher adoption and breakthrough for users. A substantial amount of money was being directed towards machine manufacturers, with insufficient focus on application and part developers. Despite the global deployment of a vast amount of underutilized 3D printing capacity, there are still not enough parts ready to be 3D printed.
Here are my two key takeaways:
- Money should be directed at companies developing parts to be 3D printed and companies building libraries of digital assets.
- Consolidation among machine manufacturers will pave the way for the adoption of unified operating systems. We have seen the advantages of that when GE acquired Concept Laser and ARCAM or when 3D Systems acquired other companies. The future is bright and exciting, and additive adoption is maturing.
If you would like to read more about some of the topics mentioned above, you can find the links below.
- GE in 3D printing push raises Arcam bid, to buy Concept Laser | Reuters
- After Stratasys and Desktop Metal announce merger plans, 3D Systems proposes acquisition | TechCrunch
- Stratasys, 3D Systems, Desktop Metal, and Nano Dimension merger activity – what does this mean for the 3D printing industry? – 3D Printing Industry
- Stratasys – Wikipedia
- 3D Systems – Wikipedia