Analyzing the Fast-Moving 3D Printing Market

3D printing (aka additive manufacturing) can offer huge cost savings and time-to-market advantages for companies that effectively implement it. As such, the 3D printing market is moving very fast – from materials, production technologies, and service providers, to applications and end-use markets.

And while the clear majority of 3D printing systems in the field today are used as prototyping systems, the ultimate target for 3D printing is the enormous global manufacturing market. There are literally hundreds of vendors around the world that are making attempts to tap into the promises of this technology opportunity. Some of these vendors have the potential shape the future of this market. Here, we’ll examine some of what IDC believes are the most intriguing "ones to watch" in the 3D printer market for 2017 and beyond.

Print service providers wanting to get involved in the 3D printing/additive-manufacturing business should seek opportunities with the growing number of companies that are looking for ways to accelerate their supply chains and reduce traditional prototyping costs. There’s a lot to learn, but as the market for these systems moves toward manufacturing there’s a huge opportunity to advance the partnerships.

With 3D printing, PSPs have an opportunity to provide additional services that can help customers solve some of their biggest business challenges. 

The Future of Today's Market Leaders

3D Systems and Stratasys have long reigned as 3D printing market leaders. Both companies have been instrumental in driving the market's historical growth over several years. In response, both 3D Systems and Stratasys aggressively made competitor and related 3D printing technology acquisitions to expand their market reach and maintain their leadership status.

However, there have been some recent negative results that have forced some re-organization and restructuring for both companies. Instead of an expansion strategy, 3D Systems and Stratasys have engaged in a more internal examination of their businesses in order to maintain the strong growth prospects projected for the future. This has included strategic plans to pursue more industrial 3D printing opportunities, while de-emphasizing some of the lower-end segments where profitability might be challenged.

Both of these market leaders have exhibited some recent vulnerability, so we wonder if the entry of much larger market participants (e.g., document printing companies, global manufacturers, etc.) will look upon one of these established 3D printing suppliers in the same manner as GE and Siemens did last year. Such a move could provide Stratasys and 3D Systems with much-deeper pockets to significantly build upon their current 3D printing ecosystem.

Inkjet Developments

IDC projects that those 3D printing systems based on "materials-jetting" technologies will grow more than 50% faster than the combined alternative additive manufacturing technologies (FDM/FFF, Sintering & Melting, SDL/LOM) out to the year 2020.

Materials-jetting technologies provide at least two key advantages over many of the other 3D printing/additive manufacturing processes:

• Color potential based on use of inkjet-based technologies; and
• Speed potential delivered by jetting materials from thousands of nozzles vs. a single point of curing or extrusion.

One critical element of the growth projection is the ongoing dedication of systems integrators with expertise in “inkjet” technologies, many of which are now focusing on the 3D printing and materials deposition markets.

The list of inkjet systems integrators includes large companies that develop their own inkjet printhead technology – Fujifilm-Dimatix, Xaar, etc. – as well as specialists such as high-profile companies like Global Inkjet Systems and Integrity Integration that have experience using inkjet across a variety of industrial and document-printing markets. IDC believes these 3D printing/additive manufacturing systems integration projects will accelerate the development of commercial and industrial 3D printing solutions in 2017.

Document Printer Companies Enter 3D Printing

At last year's RAPID event for 3D manufacturing, HP debuted its long-awaited MultiFusion 3D printers as a beginning to building "the digital furnace for digital manufacturing." HP has considerable plans for this technology as the company has identified 3D printing as a pillar for its future growth. While its 3D printers can be used for traditional prototyping applications, HP's vision is to have their 3D printers be part of a manufacturer's final production-line process. In cases where the manufacturer does not need the volume of parts often warranted by traditional injection molding or CNC processes (and doesn't want to incur the cost of this volume production and inventory), an HP 3D printer can be an optimal cost-effective solution for on-demand, short-run production.

Another near-term trend is for HP to continue to build its ecosystem with both technology and infrastructure providers (e.g., materials). We also expect that HP is diligently working with its current roster of 2D printer manufacturing customers to bring 3D printing tools into either prototyping or final production environments.

While HP has created a 3D printer business unit and is actively marketing its offering, we know that several other traditional print companies are also preparing for their own entries. These companies (and several others) are readying their 3D printer debuts in North America:

• Canon;
• Ricoh; and
• Konica Minolta.

What we will watch for in 2017 is to see which of these well-known printer brands will bring their product to market, what market opportunities will they target and how will they position themselves for success. The activity of traditional document printing companies has long-been anticipated and we believe their entries are coming closer to fruition.

The Up-and-Comers

Over the past year, IDC has seen new 3D printing systems launched that directly address some of the key limitations of the 3D printing systems that have been available. Suppliers of these systems represent a set of "up-and-coming" manufacturers that have clearly examined key market segments and worked with potential customers to develop solutions that solve business problems. Here are just a few examples:

• Massivit has begun signing distribution deals for the Massivit 1800 printer – its huge 3D printing system aimed at the point-of-purchase and tradeshow display markets. In March, it signed a distribution agreement with A&J Visual Solutions, enabling that company to sell and support Massivit 3D printing solutions in New York and New Jersey. A&J was an essential link in Massivit’s sale to Carisma Large Format last year and has also sold a machine to Big Apple in New York, the company reports.
• MarkForged, which has for years successfully offered a carbon-fiber system, has launched a new metal printer based on its Atomic Diffusion Additive Manufacturing (ADAM) technology. The metal printer from MarkForged will cost less than $100,000 (compared to more than $1 million for competitive solutions).
• Carbon, which has commercialized its CLIP technology that is up to 10 times faster than other SLA-based 3D printers; Carbon has received funding from big players such as Ford and Google. 
• Rize, which uses its Augmented Polymer Deposition technology to create 3D prints that are stronger and require no post-processing; post-processing often takes hours or even days with some competitive 3D printing solutions. 
• Desktop Metal is working on a low-cost 3D metal printing system and is expected to launch its system in 2017; the company has attracted investments from BMW, GE, Google, and Lowe's.
• Nano Dimension has been working on a materials-jetting based solution for bio-printing and for printing circuit boards; the company’s recently launched DragonFly printer is aimed at the printing of electronic components.

These up-and-coming manufacturers are important because they represent cutting-edge entries to developing market segments as well as the continued expansion of existing key segments in the automotive, aerospace, tooling, and manufacturing industries.

The Japan Connection

Another factor for the North America 3D printing market is that several manufacturers from Japan are set to attempt to make or expand their 3D printing initiatives to impact the global market in different segments. Among equipment manufacturers, Matsuura Machinery, producer of the Lumex Laser Sintering solution is planning to expand its sales activity worldwide in 2017. The Lumex Advance systems is a "hybrid" 3D printer that uses a combination of laser sintering and milling and is capable of large and complex build sizes.

Mimaki Engineering has developed a 3D printing solution that it plans to launch into the signage and graphics market on a worldwide basis in 2017 (the company showed a prototype at the 46th Japan Shop 2017 in March, and was scheduled to also display it at FESPA in early May). In so doing, Mimaki joins its closest competitors in Japan – Roland DG and Mutoh, both of which have already entered the 3D printing market. Mimaki's is a full-color solution that takes advantage of the company's expertise in color and accurate materials jetting. Mimaki had samples of output from their 3D printer at its booth at SGIA this past year.

Another Japanese company, Kabuku, has established a network of personal and professional 3D printer users that are willing to share their 3D printing capacity. Kabuku runs the same way 3D Hubs run, in that buyers are able to search up capabilities, users are paid for the time and materials used by their printer. IDC believes that Kabuku is one of the most advanced service providers in Japan, providing online quotations, sales, data optimization, and production.
These new entries to the global market are likely to change the landscape of the global 3D printing market in 2017.

UPS, Staples, FedEx, and More

The build-for-pay or on-demand parts services model in the 3D printing/additive manufacturing market has taken shape over the past few years. There are now 3D printing service providers from several segments:

• Retailers and logistics companies such as UPS Stores, Staples, FedEx, and Lowe's have all launched 3D printing initiatives. UPS Stores has an agreement with SAP and its digital manufacturing network. Staples sells 3D printers and has partnered with online 3D print provider Sculpteo to offer 3D print services. FedEx is working on ways it can leverage its fast delivery and 3D printing to transform supply chains. Lowe's' Innovation Labs has identified 3D printing as a key part of their future services, has invested in start-up 3D printer maker Desktop Metal, and was involved in putting the first 3D printers on the International Space Station. 
• On-line providers such as Sculpteo, All3DP, MakeXYZ, Materialise, Ponoko, Printelize, Protolabs, Rapid3D, Sculpteo, and White Clouds all offer a range of 3D printing services from one-off builds and prototyping to small-batch manufacturing. 
• Traditional prototyping and small-batch manufacturing companies have embraced 3D printing and additive manufacturing to provide their traditional services in new ways. Examples of companies in this segment leading the way include Jabil and Xometry.
• Startup companies like Voodoo Manufacturing and Wipro (India) are developing their capabilities to service global manufacturers in key industries such as aerospace, healthcare, and tooling.
• Many of the top commercial 3D printing equipment manufacturers now get a significant portion of their revenue from their 3D printing services. This includes leading suppliers such as 3D Systems, ExOne, Prodways, Stratasys, Sciaky, and VoxelJet.

IDC expects 3D printing equipment manufacturers to expand their services initiatives in 2017, but with all of these providers it will be very interesting to watch the progression of these service providers through 2017.

The Supplies Tie-In

Just as in the conventional printing market, the performance of the 3D printer is directly tied to the supplies used to create the output. In 3D printing, it’s the materials that function as the printing supplies.

Currently, the 3D printer materials market is extremely fragmented with hundreds of providers around the world promising high-quality output through the use of their materials. Of course, 3D printer vendors offer their own materials with the idea that performance is optimized with the vendor's own brand. However, in 3D printing, the idea that only the printer vendor should provide materials is not always considered true. In fact, some 3D printer vendors encourage the use of third-party materials, so that the customer can maximize the range of output available with their printers.

What we’re watching for in 2017 is the increased presence of major materials providers in this market to bring legitimacy and credibility. Such offerings will ensure that the combination of the 3D printer and materials will provide quality output for industrial settings.

Such providers include companies like BASF and Alcoa. BASF's move into the 3D printer materials market makes sense because the company can leverage the obvious synergy between its chemistry and R&D strengths with the need for 3D printing materials improvements. BASF already collaborates closely with OEMs across industries that are interested in applying new technologies to industrial-scale processes. BASF's experience in materials (especially in thermoplastics and photochemicals) and consulting puts the company in an enviable position to help drive the 3D printing market opportunity forward. Alcoa has announced a $60 million expansion to include an additive manufacturing center. Alcoa is one of the companies working with HP as part of HP's open materials strategy.

User Companies Acquire 3D Printer Vendors

Typically, industry acquisitions are technology- or channel-focused by a competitor to build upon an existing portfolio or extend their go-to-market strategy. In the past year, however, we observed the unusual tactic of end-user customer companies acquiring 3D printing technology companies. In both cases, the appeal of the acquisition was to bring industrial-level 3D printing to their production environments and to gain access to specific 3D printing intellectual property and skill sets.

What we’re eager to watch for in 2017 and beyond is how the acquiring end-user customer companies integrate these newly gained additive manufacturing assets. The most significant ones to watch include:

• In September 2016, General Electric (GE) acquired both Arcam and Concept Laser, in order to target opportunities in automotive, aerospace, and healthcare industries. GE has been active in this market having invested $1.5 billion in additive manufacturing technologies since 2010. 
• In August 2016, Siemens acquired an 85% stake in Materials Solutions.
• In February DMG MORI, the manufacturer of CNC milling and hybrid (3D printing plus milling) machines acquired a controlling interest in REALIZER, the manufacturer of selective laser melting (SLM) 3D printers for industrial applications.

Will other end user manufacturers follow suit and make similar 3D printer acquisitions in an effort to build a digital manufacturing infrastructure? If so, what will they look for in a 3D printer company? And: How effectively will these organizations integrate 3D printing technology into these environments? How will they measure their success?

This article is adapted from IDC's "Ones to Watch" in 3D Printing/Additive Manufacturing in 2017 from IDC (idc.com).