3D Printing is Dead, Long Live 3D Printing
Like other tech companies and startups, additive manufacturing – aka 3D printing – benefited greatly from an influx of capital in 2020-2021. Over the past two years, several 3D printing companies have gone public, raised large funding rounds, been acquired, or merged with other companies in an effort to further scale their businesses. However, the recent decline in valuations of public 3D printing companies is raising some questions about the market potential of the technology.
At least six 3D printing-focused companies went public in 2020 and 2021, most commonly through Special Purpose Acquisition Companies (SPACs). All six have seen at least a 40% drop in market capitalization, according to @crunchbase. While I certainly have concerns about what the future of 3D printing will look like, I don’t believe these drops in valuation of changes in the long-term opportunity.
It’s important to zoom out and look at the SPAC market as a whole before drawing too dire conclusions about additive manufacturing in isolation. According to Pitchbook, the de-SPAC index is down over 70% over the last two years –about the same as the average of the 3D printing SPACs. Additionally, Cathie Wood’s PRNT ETF, which is made up of 55 additive manufacturing-adjacent companies, is down a less-distressing 20% over the last two years.
The more likely takeaway from the SPAC frenzy will be that it's not an effective way to fund and grow a company. First, the compensation incentives of SPAC sponsors vs. public shareholders are poorly aligned, creating a tendency to overpay, creating a high valuation starting point for the newly public company. Second, dumping significant sums of cash into organizations that are not prepared to utilize it efficiently can fuel mismanagement and high burn rates. Third, in retrospect, the SPAC frenzy of 2020/2021 was a historically unique moment for the stock market and valuations.
Although it’s exciting to see how optimistic investors are about new technologies such as 3D printing, more than just money is needed to solve all of the issues that the industry has yet to work out. Below are some of the factors inhibiting rapid market growth.
It’s expensive to use local producers.
While the price to 3D print is coming down thanks to faster and bigger printers, more efficient materials, and process improvements in the industry, it's still not a very cheap way to manufacture most parts and products, especially in the US. The cost of the software, materials, equipment, and human-power that is needed for production currently puts a floor on prices.
It’s not as fast as you might think.
Most parts take hours to days to be printed, in addition to the time that goes into designing the digital models and post-processing the parts. Again, huge strides are being made to increase speed (and prices), but it’s difficult to guarantee ultra-fast turnaround times. Many smaller 3D printing companies are also encumbered by print failures, i.e., when a print did not complete properly and the only way to “fix” it is to reprint the part.
3D design is cumbersome.
Those not familiar with the 3D printing process often aren’t aware of what goes into creating a 3D printable digital file. This oftentimes takes longer than the printing itself, and can cost more as well. Creating files for 3D printing (e.g. STL, OBJ, STEP) is a very laborious process that requires a lot of hands-on work. Even converting a 3D scan to a 3D printable file can be challenging. However, new and improved software are making the process more efficient and intuitive so that it’s easier to go from idea to physical part.
It can’t fix the supply chain.
Early on in the pandemic people, myself included, had high hopes that 3D printing would act as a significant stopgap for snarled supply chains and revolutionize how things were produced going forward. While there are certainly small-scale examples of where this was done, such as COVID PPE, I haven’t come across any large-scale examples of manufacturers completely switching from traditional production to 3D printing. Until the factors discussed here are improved, it’s hard to make a case for switching from existing processes to 3D printing.
Not everything can be 3D printed.
Sometime in the past 10 years, the idea arose that “you can 3D print anything.” I don’t want to ignore the fantastic reality that 3D printing has made it possible to produce things that were previously impossible to manufacture, however not everything can be 3D printed, and in fact plenty of things are impossible, exorbitantly expensive, or overly complicated to 3D print. This is especially true for certain end-use parts that need to perform in real-world environments.
Here are the areas where I think investment can make the biggest difference in progressing the 3D printing industry.
Faster and bigger printers.
To make production truly scalable, 3D printers need to be able to produce more parts faster. A company that is leading the charge here is HP. The 2D and 3D printing giant currently offers one of the largest and most commercially viable 3D printers on the market, the HP Jet Fusion 5200. The printer uses a process called multi jet fusion (MJF) to lay down layers of reusable powder and fusing agent to create parts layer by layer. With a maximum build volume of 15” x 11.2” x 15” and the ability to print 309in³/hr, you can rely on this printer for low-volume production of high quality nylon parts.
Materials that behave like traditional plastics.
There are many companies successfully producing high quality 3D printing materials that are being put to use in real world settings such as biotech, aviation, and automotive uses. These companies aren’t just trying to make the right material for every part, but also to produce materials that can mimic traditional injection molding materials, specifically plastics. The benefit (and drawback in some cases) of these plastics is how long they last. It’s been difficult to create materials that can withstand stressors such as moisture, UV, solvents, extreme temperatures, and pressure, among other things. Carbon is a company that is continuously producing more and better materials for the production of end-use parts.
Generative 3D design software.
3D printing would not exist without CAD software. Before any part can start printing, it needs to first be created digitally, put into slicing software to determine which movements the printer needs to make, and then finally be output as gcode that the printer can read. Advancements in 3D printing software are helping to ensure that parts will print efficiently and operate functionally. Companies like Autodesk have software that make it possible to generatively produce optimized designs that use the least amount of material while maintaining the necessary mechanical properties, such as strength. This software also allows engineers to test parts before printing them, thereby eliminating wasted time and materials.
Additive Consulting.
For anyone who isn’t an expert in 3D printing but wants to start utilizing the technology, it’s imperative that they work with someone who is well versed in the industry before getting in too deep. It’s easy to inadvertently use a process or material that isn’t the right fit for your project, create a design that isn’t 3D printable, or do excessive iterations. Working with a company like Jett 3D will ensure that your ideas are properly vetted, thoughtfully designed, and efficiently printed.