World Reimagined

Is 3D Printing Finally Ready For Takeoff? Companies to Watch

Close-up of a 3D printer
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Global supply chains have been hit hard in recent years by trade wars and, more recently, the pandemic, creating additional opportunities for additive manufacturing (AM) or, as it is more commonly known, 3D printing. While this technology has been around for some time, its adoption has accelerated, similar to how the nearly overnight shift towards a virtual workforce created profound opportunities for those companies providing the digital infrastructure underpinning the internet. Companies ranging from supercar designer Bugatti to General Electric (GE) and Autodesk (ADSK) are changing how they operate to take advantage of additive manufacturing, which is poised to enjoy outsized growth in the coming years.

The pandemic accelerated many shifts that were already taking place in the global economy, such as the move away from the physical world and towards the virtual world, where most of us under some sort of lockdown now work, shop, connect, and are entertained. Another shift that has accelerated is towards a world of reduced globalization with more localized and flexible supply chains. Companies are shifting away from the once-heralded “just-in-time” manufacturing, as its vulnerabilities were made painfully clear in 2020.

The heightened levels of uncertainty brought on by the pandemic and the ensuing rolling lockdowns around the world created enormous logistical challenges due to the disruptions in raw material generation, manufacturing, and transportation. This came at a time when globalization and free trade were already under attack, leading to supply chain pressures and critical shortages in vital goods.

With many corporate P&Ls under increasing pressure, 3D printing can reduce not only costs but also time, simplify supply chains, and with ESG on investors’ minds, even reduce waste. The most significant environmental benefit of 3D printing is that it is additive, versus traditional manufacturing methods, which are subtractive. Yes, that sounds like a mouthful but what it means is actually pretty straightforward: Traditional manufacturing typically starts with a solid piece of something, such as wood or metal, then cuts (subtracts) from that original piece until the desired object has been produced – think Michelangelo carving David out of a slab of marble. This is why traditional manufacturing often generates a lot of waste that ends up in landfills and even the oceans. Yes, that waste can be used as raw material for something else, but that requires additional energy.

3D printing does the opposite. It continually builds layer after layer, with minimal waste. In some cases, 3D printing can use waste as raw materials. For example, researchers at the University of Louisville have developed a process to transform soybean shells leftover from soybean processing into 3D-printing materials. Keep in mind that the U.S. alone discards 8 million tons of soybean husks annually, so this is no small feat.

Amid the economic shakeup in 2020, the 3D printing market declined slightly year-over-year to about $12 billion but is expected to grow over the next five years to anywhere between $51 billion (Boston Consulting Group) to $120 billion (McKinsey). While the pandemic has been a headwind to growth for much of the global economy, it also opened a door of opportunity for 3D printing. As medical supply chains were utterly decimated at times last year, 3D printing became a vital technology to support healthcare systems in crisis.

It was used to create ventilator valves, mask connectors for CPAP and BiPAP machines, nasopharyngeal swabs, metal respirator filters, and temporary emergency isolation dwellings. The U.S. Department of Defense used 3D printing to create N95 respirators. According to the Healthcare 3D Printing Market research report, the global healthcare 3D printing market is expected to see a 19.2% CAGR between 2019 and 2026. This technology’s ability to quickly solve problems in a crisis became yet one more tailwind supporting its widespread adoption.

Using 3D printing, General Electric expects to save $2 million to $3 million per plane by reducing “the number of parts in a jet engine fuel nozzle from 20 to one, leading to a 25% weight reduction and reduced assembly times. In a new advanced turboprop engine, a dozen 3D-printed parts replace 855 components produced by multiple contractors. Reductions in the number of parts also streamline supply chains.” 3D printing can also make the previously impossible possible. Volkswagen (VLKAF) reports that its engineers at Bugatti, using 3D printing, have developed a pressure-loaded coupling rod weighing just 100 grams that can transmit a force of up to 3.5 tons. That’s only slightly more than any of us can deadlift.

At its Additive Manufacturing Campus in Munich, Germany, BMW (BMWYY) uses the technology to create precision plastic and metal components that would otherwise be “virtually impossible to produce using conventional tools,” but that can be manufactured quickly and easily using computer algorithms. 

Scientists in Australia have developed a ceramic-based ink made up of calcium phosphate that could allow surgeons to “print” bone parts with living cells to repair damaged bone tissue. This ink is part of a new technique called ceramic omnidirectional bioprinting in cell-suspension (say that five times fast) that allows bone-like structures to be printed that will harden within minutes after being placed in water.

Additive printing isn’t just for parts, human or otherwise. SQ4D, an offshoot of the New York-based S-Squared 3D Printers, reportedly built a 1,407 square foot home in only eight days with a total of 48 hours in print time. The house was entirely printed and built onsite, using less than $6,000 in materials using SQ4D’s Autonomous Robotic Construction System. For those looking to relocate, the home is now on sale for $300,000 in Riverhead, New York. According to SQ4D, their system can reduce the labor required to construct a home to as few as three people and utterly eliminates over 20 manual labor-intensive processes such as siding, framing, sheathing, etc. The structure is also reportedly mold and fire-resistant and built to withstand severe weather.

Looking for something a bit posher? A nearly 7,000 square foot 3D printed home was recently unveiled in Dubai, developed by Apis Cor in collaboration with the University of Nantes, and holds the Guinness World Record for the largest onsite 3D printed construction. Dubai’s vision for 2025 is to have at least 25% of every new building in the city 3D printed. After you’ve purchased that space-age new 3D home, you’ll need to furnish it. Meet the 3D printed, continuous form chair with a thickness of just 6mm using advanced polymers.

The bottom line is additive printing is everywhere, from manufacturing lines to the operating room to construction. It will utterly revolutionize many aspects of our economy in the coming decades in ways that most of us cannot even fathom. The winners from this cleaner, faster, and more flexible technology will be those companies that are quickly incorporating it into their operations or providing additive printing solutions, such as 3D Systems Corp (DDD), Stratasys Ltd (SSYS), General Electric, the ExOne (XONE), and Materialise (MTLS). Those companies that remain wedded to outdated, less flexible, and highly labor-intensive technologies will face profound headwinds to growth, as will, sadly, many who work in construction and manufacturing, as they will require less labor over time. However, that evolution in labor pool skills will also create an opportunity for those who offer solutions to this need to retool, but that is a story for another day.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Lenore Elle Hawkins

Lenore Elle Hawkins has, for over a decade, served as a founding partner of Calit Advisors, a boutique advisory firm specializing in mergers and acquisitions, private capital raise, and corporate finance with offices in Italy, Ireland, and California. She has previously served as the Chief Macro Strategist for Tematica Research, which primarily develops indices for Exchange Traded Products, co-authored the book Cocktail Investing, and is a regular guest on a variety of national and international investing-oriented television programs. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.

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Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

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