STATE OF THE INDUSTRY

A FLY IN THE OINTMENT

STATE OF THE INDUSTRY WORDS: DANIEL O'CONNOR

“THE REALITY IS AM IS STILL A VERY SMALL INDUSTRY; WE USE THE NUMBERS WITHOUT PUTTING THEM INTO ANY SORT OF CONTEXT.”

DR PHIL REEVES

Analysing the health of the additive manufacturing (AM) industry is a tricky task; ask the OEMs and they'll no doubt tell you all is well, even if there has been some serious restructuring. Ask a user, and they'll likely only see it from their positive perspective of a broader range of materials and machinery. Ask some industry analysts, they'll give you doom and gloom or a booming bonanza, dependent on their leanings.

The truth of the matter is that the state of the industry is almost impossible to judge. And what else do you expect from an industry in which the machines vary in price from hundreds to millions of dollars?

"It's always weird to talk about the 3D printing market because there's hardly one market," says Chris Connery VP Global Research & Analysis at Context. "That's why we break it down at this super high level of personal, professional, design and industrial machinery shipments. Take for example the industrial category [machinery over 100,000 USD typically metal]; overall, we talked about the metal 3D printing industry having a good quarter (Q3 2019), but only because of this new material extrusion metal technology like Desktop Metal and Markforged. When you break it down, you had a bit of a difficult Q3 for the powder bed fusion players. GE and EOS, for example, both saw a decline year over year in Q3."

Those figures are odd given that powder bed fusion technologies are maturing to the point BMW is using the technology for automotive series production and the metal 4

extrusion technologies are just hitting the market with relatively few use cases. Chris was keen to point out Context sees no correlation between the growth of one and the decline of the other. Perhaps there are not enough buyers to go around?

"The reality is that AM is still a very small industry," says Dr Phil Reeves, Managing Director at Reeves Insight. "We use the numbers without putting them into any context; I always listen out for other industry figures to put the AM industry into context. Yesterday on the news, they were talking about wild birds and the market for wild bird seed in the UK is 360 million GBP a year or about 400 million USD. So that's over half of the global revenue of Stratasys in 2018, (663.2 million USD for fullyear 2018)."

When HP talks about carving out a bigger slice of the 12 trillion dollar manufacturing industry for 3D printing, it is worth noting that according to the 2018 Wohler's Report the 3D printing market was worth 7.34 billion USD. That's 0.06% of that 12 trillion dollars; it's a relative drop in the ocean, but that drop is growing at a faster rate than that of manufacturing.

The investment in additive manufacturing over the last ten years has been nothing short of phenomenal. According to Crunchbase's statistics, 93% of investment in 3D printing companies has come since 2010. The total level of funding in some 2,800 companies has been 4.1 billion USD. A quarter of that has flowed into two companies alone, Carbon and Desktop Metal, both of whom have been shipping machines for less than five years.

A PICTURE OF HEALTH?

Despite the boom times in venture capital funding, there is an air of pessimism you get from spending so much time reading about the AM industry. Along with the slow Q3s for EOS and GE Additive, 2019 saw Renishaw shutter the doors to its dedicated additive manufacturing site in Staffordshire. Although the UK company remains dedicated to AM technology, with the board discussing "next-generation machines" in its most recent earnings conference call, the Stone plant closure and the resulting round of redundancies did cause shockwaves.

“THE BIGGEST BARRIER TO ADOPTION IS ECONOMICS. ”

In 2019 alone we saw Mcor collapse, Lulzbot fold only to be rescued, plus Carbon, Stratasys, EOS and HP all change leadership teams. These are rocky times for the AM industry and what with geopolitical difficulties like tariff wars and Brexit plus the outbreak of the coronavirus practically shutting down China - AM's fastest-growing market for what appears to be some months - the start of 2020 doesn't look much brighter.

Reeves believes it's inevitable that in the not too distant future we'll see some consolidation in 3D printing companies:

"There are far too many 'me too' companies, particularly in metals. If you look at the number of powder bed laser metal companies, it's tough to differentiate one from another in terms of the product offer, which can't be good for the industry because there's only a finite market. You're diluting the market between multiple players, which means that none of them gets stronger and potentially you're repressing the market and investment because nobody knows which way to turn."

Adoption is still the most significant factor holding back the industry; a recent Ultimaker survey of over 2,500 engineers and professionals revealed that the adoption rate of the those aware of the technologies was a little over 50%.

At the recent TCT Japan 2020 event, Tim Shinbara, VP & CTO at The Association For Manufacturing Technology suggested the four most significant challenges were; lack of verification and validation tools; inconsistent processes; surface finish quality; and high materials cost. Dr Phil Reeves leans more towards the final point:

"The biggest barrier to adoption is economics," says Phil Reeves. "There's a lot of talk about the ecosystem now; Formnext was a great example of this, you've got machine manufacturers, materials companies, material handling equipment companies, post-processing, you've got software for the design side, you've got software for the CAM side, you've got shop floor management software tools, DRM [digital rights management] software companies... you've got a huge ecosystem. The reality is, the industrial adoption is predicated on the weakest part of it. And the weakest part is still the economics of the process."

Phil's opinion is reflected in a recent TCT in association with Altair survey (more in Volume 28 Issue 2) in which Cost Justification ranked as the number one answer to the question, 'What challenges does your company face today regarding adopting additive in production?'

TO TCT 3SIXTY

Although it's difficult for those in our position to do much about the economics of the processes themselves, we can help with the runner up, Business Case Identification, which, in turn, may help with cost justification.

Spotting this trend for slowing down of machine sales and a lack of adoption TCT has taken it upon itself, as an independent organisation, to help drive adoption. TCT 3Sixty (29th September - 1st October) is the new brand for what was TCT Show. To help exhibitors sell more machines, the content for the new event will focus on three areas on an AM roadmap:

• Evaluation: From 20-point plans before raising that purchase order to cautionary tales of adoption gone wrong, the evaluation track will feature speakers aimed at helping visitors understand why, how and when they should be purchasing equipment.

• Adoption: Once the decision to buy has been made, the adoption track focusses on some of the low-hanging fruit use-cases that offer quick ROI.

• Optimisation: For users who may already have a machine or use a service bureau for some of the more mundane tasks and are looking to enhance their machine(s)' output be it through partconsolidation or a step into series production.

TCT is on the lookout for speakers to present use-cases in the three above areas. If you feel like you have something that can help to accelerate the adoption of additive manufacturing, get in touch with daniel.oconnor@rapidnews.com.