A small machine called a replicator produced items seemingly
out of thin air in the science-fiction series "Star Trek: The
Next Generation." Today's rapidly evolving 3D printers may be a
long way from conjuring a cup of Earl Grey tea, but they can whip
up the cup.
The market for 3D printing, or additive manufacturing, is
growing fast with the machines used to make everything from
plastic models of consumer goods to end products such as dental
fittings and aviation components.
"Modeling and prototyping are still the biggest application
(for 3D printing), but the fastest-growing application is making
parts that go into final products," said Terry Wohlers, president
of consulting firm Wohlers Associates. "That's what's really
exciting. Aerospace and medical companies in particular (are
using the technology)."
Overall spending on 3D printers is forecast to reach $1.5
billion this year, up 15% from 2011, according to Piper Jaffray
analyst Troy Jensen. He expects the market to grow 16% a year, to
about $5 billion by 2020.
Wohlers Associates believes 3D printers and services will
generate $3.7 billion worldwide in 2015 and pass $6.5 billion in
Shares of leading 3D printer companiesStratasys (
) and3D Systems (
) have been on a tear this year as investors have embraced their
Stratasys of Eden Prairie, Minn., and 3D Systems of Rock Hill,
S.C., are the top performers in IBD's machinery-materials
handling and automation industry group. The 10-stock group ranked
No. 51 on Friday out of 197 industry segments.
In addition to the top 3D printing companies, the group
includes makers of forklift trucks and hoists likeCascade (
),Columbus McKinnon (
) andNacco Industries (
It also includesPerceptron (PRCP), which makes non-contact
measurement and inspection systems for industrial and commercial
applications.HollySys Automation Technologies (HOLI) is a
provider of automation and control technologies and applications
But it's 3D printing that's driving interest in the industry
The technology for three-dimensional printing has been around
since the late 1980s. What's exciting people now are new
applications, improved quality and lower-cost equipment.
"In the commercial market, the declining prices of the
printers is stimulating new applications and greater usage of the
machines," said James Ricchiuti, an analyst with Needham &
Advances allowing the printers to use different and better
materials has enabled more end-use parts, such as for dental
fittings, hearing aids and medical applications, he says.
Low-cost 3D printers are attracting hobbyists who want to
tinker around with the technology, Ricchiuti says. "It's still
very early to see how this technology fares in the consumer
market," he said.
Additive manufacturing is the process of building a solid 3D
object by joining materials, usually layer upon layer. The
systems read blueprints generated by computer-aided design models
or 3D scanners to create parts that could be difficult or
expensive to make any other way.
The automotive, aerospace, architecture, consumer goods and
health care industries are all early adopters of the
In the health care field alone, 3D printers are being used to
make custom-fit hearing aids, as well as orthopedic and dental
implants like crowns, bridges and caps. More than 500,000
3D-printed dental implants now are in patients worldwide,
3D printing also is being used to produce models to help
surgeons plan for complex surgeries.
The "bread and butter" for 3D printer makers is high-end and
mid-range machines, Wohlers says. Last year, manufacturers sold
6,050 machines costing $5,000 or more. Such 3D printers typically
sell for $15,000 to $500,000.
The emergence of compact, low-end 3D printers costing $1,000
to $2,000 in the last few years has opened up the market to
consumers. Last year, about 23,000 machines costing less than
$5,000 were sold, Wohlers says.
Many of them went to do-it-yourselfers who make crafts,
jewelry and other items. Schools also bought a lot of those
cheaper machines, he says.
3D Systems started shipping a new product in May called the
Cube home 3D printer. It retails for $1,300 and can print plastic
objects as big as a 5.5-inch cube.
3D printers help companies cut the time it takes to develop
new products and produce one-of-a-kind or limited-run items.
This, in turn, reduces the time to market for new products and
speeds delivery of other products.
If 3D printers can offer a competitive advantage to
manufacturers, analysts argue, they're likely to stay in demand
despite the macroeconomic uncertainty.
But 3D printer sales have been cyclical. Industry unit sales
were flat in 2008, down in 2009 and up the past two years.
Those slack years opened the door for industry
The most active acquirer has been 3D Systems, which has
purchased more than 20 companies since late 2009. Its biggest
deal was buying Z Corp. and Vidar Systems for $135.5 million cash
Stratasys has been conservative on the acquisition front, but
is expected to close its merger with Israel-based Objet within
If the 3D printing market continues to grow as it has, 3D
Systems and Stratasys themselves could become acquisition targets
by industrial giants.Hewlett-Packard (HPQ) already has a reseller
relationship with Stratasys.
"The next level for some of these companies would be an
acquisition by a major corporation," Wohlers said.
A host of smaller companies could be in play as well,
including Stockholm-based Arcam; EOS, a Germany-based laser
specialist; EnvisionTec, also in Germany; and San Jose-based
Production materials act as a critical hurdle in the adoption
of 3D printing as the market shifts from making models and
prototypes to finished end-use products. Traditional
manufacturing can choose from thousands of plastics, metals and
other materials for producing goods. But the 3D printing space
has only a couple hundred materials, Wohlers says.
Also, 3D printer companies look to those materials as a profit
center, much like HP and other 2D printer firms view ink and
paper. The prices for materials used in 3D printing have to be
competitive with materials used in traditional manufacturing,
Currently, the plastics and metals used by 3D printers are
much more expensive than what's available elsewhere. But the
materials are sized and formatted to fit the printers.
If Stratasys and 3D Systems "cling to this old way of
thinking" about printer consumables, he cautions, they could be
outpaced by other companies selling cheaper materials.
A risk for investors: the 15-minutes-of-fame factor. The hype
over the technology may be getting ahead of the 3D printer market
"It's never got so much attention before," Wohlers said,
pointing out recent coverage by USA Today, the Wall Street
Journal and CBS Radio News. "The press can't seem to get enough