3D Printing….It’s Only Just Begun

3d PrintingIn the past couple of years there has been a lot of hype around the emerging 3-D Printing Industry. Companies have been popping up all over the map, creating everything from industrial and commercial grade 3-D Printers to printers that you could fit on your desk at home. What is truly fascinating about this industry, and any other industry in its growth stage, is observing how it develops, both technologically and financially. Like computers, to be an early adopter of the technology, you were forced to spend thousands of dollars to get even the most basic machine. Now, however, you can get a machine for less than a thousand dollars, perfect for aspiring product developers, engineers, and even hobbyists.

Companies like 3D Systems (DDD) and Stratasys (SSYS) pioneered this industry and started providing these expensive printers to companies interested in in-house rapid prototyping and part development. It changed the way we looked at prototyping; hugely reducing costs, batch size, and build time.  Prototyping and design companies saw an investment opportunity here. Due to the high purchase price of the printers, but low build costs compared to a traditional prototyping methods, companies started offering 3-D printing services to smaller companies and start-ups who needed parts and prototypes relatively cheaply. The 3-D prototyping service industry exploded and the companies producing these printers got to come along for the ride and even started developing their own service businesses. As revenue and interest grew, so did innovation within the industry, which brought along some major changes to the young industry.

As entry level 3-D printers drop in price, companies and individuals are able to purchase their own machines and will no longer have to rely on outsourcing the projects to other companies. However, while 3-D printers may be getting cheaper, they are not able to produce parts of the same quality as commercial printers, so there is still huge demand for the rapid prototyping services. 3-D printer companies have primarily been focused on the high cost, commercial printers, but are now becoming focused on adapting the technology to be affordable, yet high quality. This comes with its own set of unique challenges. As seen in Stratasys’ most recent Earnings Report, MakerBot is proving to be a difficult product to scale and distribute in the industry, which leaves me concerned for the future of this area (3). More money is put into research and development while prices for new models decrease. This is an interesting aspect of certain growth industries, companies invest more money into making a product better and cheaper, but in order to see a return on investment, these companies have to sell a larger quantity of printers at a lower price. One question that comes up is, will 3-D printers be the next inkjet printers; given away with the purchase of any new computer? While that time is quite far off, it is something that should be considered when looking at 3-D printing companies as an investment. More recently, companies have started experimenting with various materials and qualities for different 3-D printed products, and this is where I feel the true value of these machines lies.

While the early stages of this industry have mostly consisted of creating small parts and prototypes out of thermoplastics, the future of this industry and its applications is far reaching. I believe that we will continue to see 3-D printers disrupt the manufacturing industry, and as quality increases and cost decreases, we will start to see more and more manufacturing being done with these printers, not just prototyping. We have started to see this trend and I think we will continue to see it evolve as the technology does. One example is experimentation being done with 3-D printed cars. As research and development continues, I only see larger, completely 3-D printed objects becoming more feasible. One area that is extremely interesting is with 3-D printed homes and buildings. Early experiments have been done with these large scale projects to showcase the capabilities and the future of the technology. In one case, a team was able to build a 3-D printed house in less than 24 hours using a method called Contour Crafting, developed at the University of Southern California (2). While this may not be the most luxurious house on the market, it illustrates the potential of this technology. When looking around the world, we see a lack of proper housing for a large portion of our expanding population, and the ability to rapidly create houses could provide a solution to this problem.

Another interesting area for the future of 3-D printing is space exploration. The first 3-D printer to be sent to space and successfully produce parts is currently at the International Space Station. Space travel is extremely expensive, so shipping parts and tools up to space has to be done as efficiently as possible. This often means that if something breaks or is needed, astronauts are forced to go without it for months until the next shipment arrives from Earth. With a functioning 3-D printer onboard the ISS, NASA and the California-based company, Made in Space, were able to email astronauts a file for a hand tool which became the first part to be successfully transmitted and then printed in space. While this may seem like a small feat, it could potentially save millions of dollars and be a stepping stone to further exploration.

While this technology is still relatively new, it is exciting to see it tested for a variety of applications. Only time will tell the benefits that 3-D printers can provide in our everyday lives. At this stage, as with any young industry, we can expect the volatility to be very high. As the initial hype wears off, and the uncertainty of where these printers will take us, investors are left wary of these companies and the stock price to plummeted.  As new applications for 3-D printers are developed, the value of companies positioned to successfully take on these challenges will skyrocket. That’s why I believe one of these major players could be a great long term investment, especially with their currently low stock prices. Who do you think will be in the race to provide world changing technology?

The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

 

  1. http://www.space.com/topics/3d-printing/
  2. http://www.popsci.com/technology/article/2012-08/researcher-aims-print-3-d-print-entire-houses-out-concrete-20-hours
  3. http://www.thestreet.com/story/13064765/2/stratasys-ssys-earnings-report-q4-2014-conference-call-transcript.html
  4. Image Credit – http://i2.cdn.turner.com/cnn/2013/images/07/10/3d.printing.jpg

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