3-D Printed Finished Goods Are No Joke

Additive manufacturing authority Wohlers Associates has come out with a note saying how it expects the 3-D printed finished goods market to "far surpass" the 3-D printed prototyping market. Driven by continued advancements in 3-D printing technology, investors can look forward to 3-D printing playing a bigger role in finished goods manufacturing.

A growing trend
From 2003 to 2012, the 3-D printed finished goods market grew from 3.9% of all 3-D printing revenues to 28.3% of revenues last year. Currently, General Electric (NYSE: GE  ) is positioning itself to become a huge benefactor from 3-D printing with its plan to "print" 85,000 fuel nozzles for its upcoming Leap engine that will be used in commercial aircraft.

By utilizing a 3-D printing technology called selective laser sintering, or SLS, GE will be able to "print" the fuel nozzle as one finished part, capable of withstanding 2,400 degrees Fahrenheit. The same nozzle made with conventional manufacturing methods would have to be made in 20 parts and would tie up additional resources during the assembly process. Ultimately, GE hopes to put out 45,000 fuel nozzles a year from its 3-D printing operations, but it isn't expected to reach this goal for a number of years.

Due to capacity constraints, GE would have to purchase 60-70 current-generation printers, which can cost upwards of $1 million per device, in order to achieve its target output. Instead, GE has pledged to invest "tens of millions" of dollars toward building out the technology supply chain so that next-generation 3-D printers can handle three to four times the capacity. In other words, the next-generation of industrial 3-D printers will likely be better suited and more cost effective to handle the scale of an industrial giant like GE.

3-D winners
Because GE already owns a total of 35 3-D printers made by EOS and Arcam, it's likely for GE to continue investing with these partners to build higher capacity machines. In addition, 3D Systems (NYSE: DDD  ) may have the potential to play a bigger part in GE's 3-D printing scale-up plans. The company's purchase of metal-printing specialist Phenix Systems gives it more credibility on the subject, not to mention, 3D Systems' CEO feels pretty confident that its 3-D printers are up for the job. If you're a 3D Systems investor, you should find it encouraging that GE is testing out some of 3D Systems' printers for this role.

Potential losers
Stratasys
(NASDAQ: SSYS  ) could have the most to lose because its 3-D printers are primarily meant for prototyping and currently do not support printing with metals. It's expected that Stratasys will eventually release 3-D metal printer, but until it does, Stratasys remains focused on a market that is ultimately likely to represent a much smaller percentage of the entire 3-D printing pie.

Additionally, neither voxeljet's (NYSE: VJET  ) nor ExOne's (NASDAQ: XONE  ) 3-D printing technology is well-suited for GE's current fuel nozzle needs because neither employ the use of SLS technology. Instead, both companies use a bonding agent to adhere layers of material together, as opposed to a laser that fuses layers together. Investors shouldn't take this to mean that voxeljet or ExOne won't be playing a big role in the future of finished parts 3-D printing. The reason is that both are heavily reliant on printing with sand on an industrial scale, which is an extremely important material that can revolutionize the traditional tooling and sand casting process.

The real winner
Because the ratio of prototypes to finished products is often upwards of 1:1,000, it's likely only a matter of time before more money flows toward the finished goods side of the 3-D printing industry. The major driver behind this shift will come from industrial manufacturers like GE demanding that 3-D printing technology continue to advance in ways that suits their operational scale.

At the end of the day, GE is the true winner because its operations have the most to gain from implementing 3-D printing technology. If all goes well with printing these fuel injectors, the implications are enormous. Should GE then decide to implement 3-D printing across as much of its manufacturing footprint as possible, we're talking about potentially billions of dollars in savings.

You'll likely be served well by sticking with 3-D printing companies that cater to the needs of finished goods manufacturers. You could also zero in on companies like GE that stand to save billions in expenses over the long term by implementing 3-D printing.

3-D printing could make you rich
As companies like GE stand to save billions, savvy investors stand to make a fortune from the 3-D printing revolution. The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion dollar industry." And everyone from BMW, to Nike, to the U.S. Air Force is already using it every day. Watch The Motley Fool's shocking video presentation today to discover the garage gadget that's putting an end to the Made In China era... and learn the investing strategy we've used to double our money on these 3 stocks. Click here to watch now!


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  • Report this Comment On November 23, 2013, at 2:04 PM, MotherCourage wrote:

    VJET is exactly the type of company that has made Germany the top exporter in the World: more $ sales exported per year than China! In fact, small companies makeup 2/3 of Germany’s GNP. They stay where they are by investing in cutting edge technology, and relentless research and development with a great deal of support by the government and the many research institutes. 500 of Germany’s small companies are number one in their field of expertise. It is a national obsession. Germany nurses and assists these companies along in many ways and especially--as many others have noted--in the area of globalization. So, when VJET says that they will expand to North America and Asia, they will be doing it with the pros, believe me. All manner of support systems will be available to them from government agencies to the ubiquitous German National Chambers of Commerce.

    Right now VJEt is the number one 3-D printer in Europe. They sold off their “old” technology to DDD and have moved on to a revolutionary system that is faster and less expensive. If 3-D printing becomes the manufacturing of the future, then the faster, less expensive company will be at the top. Will the giants be buying slower, more expensive systems? Hardly.

    As for the accusation that VJET is “giving” its product away with payment pans for customers, well, let’s be honest: would there be an automobile industry if that were not possible?

    This is the time to get excited and be amazed at what this company is doing: everything from autos to historical architecture. Beware of short sellers denigrating a company to make a fortune at your expense.

  • Report this Comment On November 25, 2013, at 7:35 PM, wildeweasel wrote:

    Saying SSYS, XONE, and VJET will be be losers is akin to saying Mcdonald's and Apple will be losers as well because they don't make 3D printers. There are more things made with plastic then any other material and there will be a huge market for that in the future. Sometimes the best strategy is to not try to be a jack of all trades. ARCAM specializes in titanium and cobalt alloys so their market will be somewhat limited by functional as well as material costs I still expect that they will do very well in the field they have chosen to specialize in.

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