Latest Growth Estimates for 3D Printing Industry

Growth Estimates for 3D Printing Industry

The 3D printing industry is changing the face of manufacturing process in a very rapid pace. As Goldman Sachs rightfully pointed out, 3D printing is one of the eight technologies that will creatively destroy the way business is done. The 3D printing industry is expected to go into a boom phase in a matter of few years. The profits are going to increase in leaps and bounds. Recently, three new analyst reports from reputed firms attempt to estimate the size of the fast growing sector. Significant growth in this sector is expected according to reports from firms like Lux Research, Canalys and Credit Suisse. All the three firms strongly believe that the 3D industry will become the mainstream tools in the manufacturing business and it will encounter rapid growth; the sole difference that exists in their reports would be that the growth rate; which is being predicted by all the three differently.

According to the Lux Research, the 3D printing industry will quadruple to $12 billion by the year 2025. Industries such as aerospace, medical, automotive, consumer products, architecture and electronics are considered to be the leading consumers of the 3D printing industry. The vast usage of 3D printing (3DP) in these sectors will elevate the 3D market to $12 billion by the year 2025. Lux Research says that the 3DP market growth rate will be propelled by the factors – the printer, the formulated materials and the parts that are produced. As per the estimates done by the Lux’s model; printers will be worth $3.2 billion, while $2billion represents the formulated materials and $7billion will come from the value of parts produced.

The analysts at Lux Research, which provides strategic advice and ongoing intelligence for emerging technologies, have developed a model that incorporates the industry specific materials and the requirement of the market; the adoption of new materials and the inputs that were generated by interviewing nearly 100 entities who exist in the 3D printing value chain. Based on these parameters, the Lux research team has generated some findings.

Razor Blade Model: The giants of 3D printer companies such as 3D Systems, Stratasys, and EOS sell formulated materials at a very high rate, 10 times to 100 times. This approach was acceptable as long as these companies used 3D printers for proto-typing, but it remains a major curtailing factor to the use of 3DP for production parts.

These companies want to maintain a monopoly in the market and do not allow third-party materials suppliers from entering the market.

Four companies dominate the market: The Lux innovation grid has placed only four companies in the dominant category. This is done on the basis of technical and business scores. These companies are 3D Systems, Stratasys, EOS and Arcam. When the four companies are combined the total percentage of shares that they hold in the 3DP market is 31%. Arcam is quite well known for its open materials supply model. There are a few independent material suppliers such as Raymor Industries, Taulman 3D, Made Solid and Ceralink, among them offer high potential, but none of these companies are dominant.

Expiring patents will trigger growth: In the year of 2006 many companies which had patents for 3DP technologies expired. This gave companies like Makerbot and Shapeways an opportunity to manufacture lower-cost desktop printers and consumer-facing 3DP services. A bigger change in expected in a another three years as more patents for 3DP technologies are going to expire; enabling other companies to take a plunge in the pool of 3DP. This will reduce the price of the 3DP technologies as well as widen the range of commodities available to the users.

On the other hand, Canalys estimates that the sales in the 3DP industry was $2.5bn in 2013; to which there will be a considerable growth of about $1.3bn by the year 2014, which means that the sales figure of the 3DP industry would be  $3.8bn in 2014. By the year of 2018 this figure is expected to reach $16.2bn. This represents an expected CAGR of 45.7% between 2013 and 2018.

Prediction by Canalys:

According to Canalys Senior Analyst, Tim Shepherd; “This is a market with enormous growth potential now that the main barriers to up-take are being addressed. Advances in technology are yielding faster print times and enabling objects to be printed in greater combinations of materials, colors and finishes. Crucially, prices are also falling, making the technology an increasingly feasible option for a broad variety of enterprise and consumer uses, restricted only by computer aided design competencies and printer available- both of which are set to improve significantly”.

As a short term plan, Canalys is expecting printing to order services that could bring in the considerable growth whereas on the other hand penetration of these services is lagging behind due to technological advances. The value of 3DP market is expected to grow with leap and bounds in the next few years so the value growth will reflect an increase in the commercial printer volumes and also drive growth volume and value of consumable shipments, including both resistant printing materials and removable or dissolvable support materials.

On another note, Credit Suisse holds a opinion which is slightly different from the previous two predictions. According to a Credit Suisse team led by Julian Mitchell took a plunge into this sector, and came up with some growth statistics pinpointing which market will be in the driver’s seat.

Julian Mitchell says: “Most corporate guidance defaults to the assumptions of industry consultants who estimate that the 3D printing market will grow at ~20% annually. We challenge this assumption and attempt to quantify the addressable market by investigating the opportunities within key verticals such as aerospace, automotive, health care, and consumer. We conclude that these four markets alone (which comprise ~ 50% of the AM market today) represent sufficient opportunity to sustain 20-30% annual revenue growth, bolstered by the technology’s transition from prototyping to end use parts and expansion into metals.”

The team of Credit Suisse has supported its prediction with the help of a few statistics.

The health care industry is already rolling skin deep in the 3DP industry. Mitchell and her team say that more than 90% of all hearing-aid shells today are produced through the process. There are more than 14,000 dental labs in US, and the dental industry is the principal consumer of 3DP products. The market penetration is expected to improve to 18% from 12% by 2016.

Another industry that is not untouched by the 3DP industry in the aerospace industry, Credit Suisse team sees a 30% compound annual growth rate; with airplane engines leading the way. According to the analysis that is made by the team; the capital expenditure in manufacturing an aircraft engine for example are generally 4% of sales, the majority of this is allocated in manufacturing of equipments. By 2016 the sales of the aircraft engine industry is expected to be $50bn, this in turn implies that a whole new market for printing systems for aircraft engines will be established in the year 2016 which will have a value of $1.4bn.

The most significant expansion in the 3DP will come from personal use. In the year of 2006 many companies which had patents for 3DP technologies expired. This gave companies like Makerbot which is owned by Stratasys, an opportunity to manufacture lower-cost desktop printers. Manufacturers suggest that the retail price would be in the price range of $2,200-2,800.

Image Credit: KEn Teegardin (flickrhandle: teegardin)

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