If you're following the 3-D printing space, you might know that industry juggernaut 3D Systems (NYSE: DDD ) and Google's (NASDAQ: GOOG ) Motorola Mobility unit announced in November that they were teaming on Project Ara. (Google's recently announced sale of Motorola to Lenovo doesn't include Motorola's advanced technology and projects group, which is the group working on Project Ara.)
Project Ara's goal is to create a large-scale 3-D printing manufacturing platform capable of producing customizable open-source modular smartphones. 3D Systems is charged with developing the 3-D printing platform to churn the Google devices out.
3D Systems' mission entails integrating the 3-D printing of various types of materials that comprise a smartphone into a single platform. This presents one big hang-up on the materials side: 3D Systems doesn't currently possess the capability to 3-D print conductive materials to produce electronic circuitry. So, it needs to develop it internally, partner with a company that does have this capability, and/or acquire such a company to fulfill its end of Project Ara.
Acquisition or partnership possibilities
I don't usually like to engage in acquisition speculation, because much of what's out there seems to be pulled from thin air. That said, I'm going to indulge here, as we know that 3D Systems absolutely needs the capability to 3-D print conductive materials. This isn't the more usual case where an acquisition or partnership would be "nice to have" because there's a perceived good synergistic fit. This is a "must have" if 3D Systems is to fulfill its part of the deal with Google. Notably, Google usually gets what it wants, as its megadeep pockets enable the company to buy whatever talent and/or tech capabilities it needs for its projects.
Here are two electronics 3-D printing technologies that might fit 3D Systems' current or future needs:
Possibility No. 1: Optomec
This Albuquerque, NM-based private company seems like it could fill a hole in 3D Systems' portfolio -- if it's for sale. Interestingly enough, Optomec has ties with 3D Systems' prime competitor, Stratasys (NASDAQ: SSYS ) .
Optomec's no green-behind-the-ears upstart. The company developed its metals 3-D printing system based on technology developed at Sandia National Laboratories, and commercialized 15 years ago. It makes two systems: an Aerosol Jet, which prints conductive materials, and a Laser Engineered Net Shaping, or LENS, which prints metals
Last June, Optomec announced that its aerosol jet system had the capability to print antennas onto plastic inserts and enclosures for smartphones and other mobile devices. Optomec's system successfully printed antennas for uses including LTE, NFC, GPS, WLAN, and Bluetooth. The company's system can produce 1 million to 2 million units per year, depending on the antenna design.
As for Optomec's ties with Stratasys: The two companies teamed on a project that produced what was called the world's first conventional 3-D printing/electronics 3-D printing hybrid structure -- a "smart wing" for an unmanned aerial vehicle, or UAV. The plastic wing was first printed using Stratasys' 3-D technology, fused deposition modeling, and then an Optomec aerosol jet printed an antenna, sensor, and circuitry onto the wing.
Additionally, in 2012, Optomec located its R&D facility in St. Paul, MN. Stratasys is based in a Minneapolis-St. Paul suburb.
Yes, one does have to wonder if Stratasys could be interested in scooping up Optomec, as it would net it metals and conductive materials 3-D printing capabilities in one fell swoop. Stratasys, unlike 3D Systems, doesn't have metals printing capabilities, though it's just a matter of time, in my opinion. I'll be looking into how Optomec's LENS metals printing tech stacks up against laser sintering, the leading metals 3-D printing technology, and Sweden-based Arcam's electron beam melting tech.
Possibility No. 2: Xerox's technology
It's a little-known fact that 2-D printer innovator Xerox (NYSE: XRX ) has been collaborating with 3D Systems for a decade-and-a-half, with the collaboration leading to 3D Systems' best-selling ProJet line of printers. The two companies were also jointly in the news in December, when 3D Systems acquired a portion of Xerox's solid-ink engineering group, along with 100 Xerox engineers.
That sale didn't include a promising technology to 3-D print electronic circuitry that Xerox's famed Palo Alto Research Center, or PARC, is working on called "Xerographic micro-assembly." This technology is based on laser printing technology, which Xerox invented in the 1970s. The process involves breaking down silicon wafers into tens of thousands of tiny "chiplets," bottling them to produce the "ink," and printing the circuitry onto a surface.
In addition to producing microprocessors and computer memory, this technology can also be used to produce microelectromechanical systems, or MEMS, which are used for actuating and sensing.
Unlike Optomec's technology, which is fully up and running, Xerox's is still in the R&D stage.
Foolish final thoughts
3D Systems needs the capability to 3-D print electronic components for Project Ara, and it's highly likely it will partner with or buy a company (or technology) to acquire this capability. Xerox and privately held Optomec both have technology that might be of interest to 3D Systems.
Even if an acquisition by 3D Systems turns out to be a no-go, investors might want to keep their eyes on Optomec. The company announced last fall that it saw its bookings for the first half of 2013 soar more than 100%. Given its fast growth, an IPO seems entirely possible, especially if the 3-D printing sector shakes its 2014 blues, and returns to its red-hot days.
3-D printers aren't the only growth stocks around. You might want to check these out.
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