3D Printing Is Going Metal, Bringing Big Opportunities To Manufacturers
3D printing is set to have seismic implications on manufacturing companies, especially in relation to cross-border trade. Also known as additive manufacturing, 3D printing can lessen labour needs, reducing the need to source parts and goods across borders. If today’s pace of technological development continues, manufacturers’ sourcing practices and production strategies are set for massive changes.
“3D printing has the potential to restructure supply chains, as manufacturers switch to using on-premise additive manufacturing capabilities. This could result in the reduction of a company’s geographical footprint for sourcing raw materials, potentially lowering indirect taxes and reconfiguring taxable jurisdictions and transfer pricing strategies,” Rick Schreiber, Managing Partner in Assurances and Advisory Services and head of BDO USA’s Manufacturing & Distribution practice, says.
The $12 trillion market on the line
The global manufacturing market is difficult to quantify precisely, but estimates say it generates revenues of up to $12 trillion a year. According to a report from Dutch bank ING, developments of 3D printing technology means that as much as 40% of that market could go from global to local over the next few decades.
“Recent technological advances indicate that high-speed and thus mass production with 3D printers is becoming a reality,” the report says.
The argument is that production strategies involving manufacturing products where labour and production costs are low and shipping them to their destination are under pressure from advances in 3D printing. The tipping point will be when the price of 3D printing products locally drops enough to compete with the combined price of outsourced production and transport costs. Once that happens, moving productions to places like China or Southeast Asia no longer makes financial sense, and manufacturing companies could see a boom in local and regional demand for their products.
One major stumbling block is that while 3D printers are faster and cheaper than ever, they have struggled to be competitive when it comes to pure production. That has been doubly true for 3D printing in metal. As much of the world’s manufacturing industry involves products that are either partially or wholly made of metals, this has made the aforementioned stumbling block even more difficult to traverse.
Cheaper, faster, more – soon/now
All that is changing rapidly and 3D printers are moving from primarily being used in rapid prototyping and design projects to production lines. Both large companies and start-ups are releasing new 3D printers with metal printing capabilities far and beyond what was considered top-of-the-line just a few years ago.
“Conventional 3D printing methods have historically been prohibitively expensive and time-consuming, reliant on high heat and lasers, limiting their use to large manufacturers, primarily in the aerospace and defence, auto and medical device sectors. Recently, new methods have been introduced that work for a much more extensive range of metals, alloys and compounds as well as more sophisticated architectures. These new methods are also faster and cheaper—which means it’s just a matter of time before 3D printing goes mainstream,” Rick Schreiber says.
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Epitomising the new generation of printers is the products from Desktop Metal, a company that this summer raised $115 million from a string of backers, including Google Ventures. Desktop Metal’s claim to fame is that it’s platform can be used to 3D print things in metal 20 times cheaper and 100 times faster.
Desktop Metal is far from the only company that is showing great progress. For example, Australian Titomic’s printer can print a titanium bicycle frame in 25 minutes, a feat that helped the company record an impressive IPO on the Australian stock market. NASA has also been working with 3D printing to make rocket parts.
In spite of all the advances, it is important to note that 3D printing in metal still has some way to go before becoming ubiquitous. Desktop Metal’s printers are impressive, but will still set you back around $360,000 for the production unit and $49,000 for the studio printer. However, even at that price, the printers can compete with traditional production methods in some cases, like the production of small quantities of high-precision goods. As noted by Technology Review, this is because they eliminate costs associated with tooling, casting and moulds.
The many uses cases – and credits
For manufacturing companies, there is a long list of ways that 3D printing in metal can help boost efficiency and innovation.
“3D printing holds a great deal of promise for manufacturers, especially as machines’ capabilities are getting better while their prices drop. As consumers demand greater customization, 3D printing allows for faster prototype design and shorter production runs, which can make limited-market products more profitable. We’re also going to see an evolution in product design and speed to market. Additive manufacturing and rapid prototyping techniques are enabling a “fail fast” mentality, more complex design, smaller parts and less waste. This coincides with a shift in demand from standardization to customized products and modular manufacturing,” Rick Schreiber says.
Along with the spread of 3D printers, there has been a veritable explosion in the methods used to 3D print in metal. These new technologies include things like laser melting and using electron beams in vacuum environments. Both technologies are very accurate, which, like many other new printing methods, expands the possible use cases for 3D printers.
Rise in acquisitions
As is often the case, new technological solutions and advances have led to M&A activity. After a few lean years, GE’s acquisitions of Arcam and SLM Solutions, worth a combined $1.4 billion, could be the start to an M&A boom for 3D printing. It is worth noting that both acquired companies specialise in 3D metal printing, and that the acquisitions help position GE as a supplier of 3D printers and materials. It also, as noted in the Wall Street Journal, means that “GE could cut costs by $3 billion to $5 billion across the company, since the technology could reduce design and material costs.”
Other large companies are making similar acquisitions. Siemens, for example, acquired Material Solutions. HP bought David Vision Systems, stating an aim to establish itself as a producer of 3D printers that can print objects in metal.
In the start-up sphere, CB Insights data shows that funding activity is also on the rise, with Ultimaker and Carbon 3D picking up respectively $17 million and $81 million.
As the technology advances, so do growth figures for the 3D Printing market, which is expected to gross $11 billion by 2022, boasting an impressive compound annual growth rate of 27% for the period. Competition in the market is expected to intensify as new products and innovations lead to an increase in product/service extensions, which in turn could boost M&A.